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Call No. 32*7 '7-3 1 M>l &*%> - Accession No 3 /y 


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This book shouJc be returned on or before the date last marked be 







SURVEY OP AMERICAN FOREIGN RELATIONS (annual), prepared under the 
direction of Charles P. Howland. 

POLITICAL HANDBOOK OF THE WORLD (annual), edited by Walter H. Mai- 


THE RECOVERY OF GERMANY by James W. Angell (second printing). 

EUROPE: THE WORLD'S BANKER, 18701914. An Account of European 
Foreign Investment and the Connection of World Finance with Diplo- 
macy before the War, by Herbert Feis. 








Copyright, 1930, by Yale University Press 
Printed in the United States of America 

All rights reserved. This book may not be repro- 
duced, in whole or in part, in any form, except 
by written permission from the publishers. 


fTlHE purpose of the Council on Foreign Relations is to study 
JL the international aspects of America's political, economic, 
and financial problems. 

In addition to holding general and group meetings, the Council 
publishes Foreign Affairs, a quarterly review ; the annual Survey 
of American Foreign Relations; the Political Handbook of the 
World 9 issued annually ; and individual volumes on special inter- 
national questions. 



Honorary President President 


Vice-President Secretary and Treasurer 

Executive Director 














DURING the first years of this annual SURVEY an effort is 
being made to provide for certain foreign relations of the 
United States the background historical, cultural, economic 
without which those particular relations cannot be well under- 
stood. From this point of view some account was given in the SUR- 
VEY, 1928 of the developments of the fundamental traditions of 
the United States in foreign policy, and the discussion of Dis- 
armament was preceded by an outline of the evolving naval poli- 
cies of Great Britain and the United States. Similarly the SUR- 
VEY, 1929 contained a brief account of the background, as well as 
the American relations, of the Caribbean republics other than 

In the present volume it is sought to combine with a record of 
its foreign relations a similar background for "the territory called 
China" which contains one- fourth of the human race ; for to un- 
derstand the chaos which has been produced in China by the dis- 
integration of the old order it is necessary to have some apprecia- 
tion of the elements of Chinese social life and traditions. Some of 
the folkways of the people are presented and an attempt is made 
briefly to indicate the effect upon them of the impact of western 
civilization, aggressive, possessed of an irresistible momentum, 
using all the resources of large-scale organization the impact of 
a mineral upon a vegetable civilization or of a locomotive upon a 
wheelbarrow civilization. 

Obviously not enough background is given to satisfy those who 
"know their China." A survey of all such movements would cover 
the recent labor problems arising out of industrialization, the 
progress of the peasant and of the women's movements, the decay 
of communications, the progress in the modernization of the 
army, the growth of the Chinese press, the obvious changes in the 
material culture of the people such as the use of glass instead of 
paper for windows and the introduction of electric power and 
lighting in the large cities. 1 The aim is to suggest only that part 

i For a serious study of the Chinese culture-pattern and of its modern evolution 
there are, among a host of books, Frank Goodnow, China, An Analysis; Richard 


of Chinese ancient ways and of the new movements in the lives of 
the Chinese which essentially bear upon their foreign relations. 

There is not the same necessity for giving an equivalent back- 
ground for United States relations with Japan. That masterful 
nation is compact, disciplined, modernized in the western sense, 
conscious and purposeful as to the direction of its destiny, and has 
a front place in the continuous sessions of the great nations. 

A short narrative is given of the arrival of Americans in the Far 
East, the growing contacts, the opening up of China and Japan, 
and the gradual formation of policies to meet the pressure of Eu- 
ropean rivalries and to keep abreast of the new order of things 
which is coming to pass in the Pacific. 

The short chapter on the Philippines is strictly limited to their 
international relations and the questions which they raise for the 
United States, avoiding treatment of the desire of the Filipinos 
themselves for independence, and the forces in the United States 
idealistic or selfish which support or go counter to that desire. 

There is a chapter describing briefly the manner in which 
powerful nations Great Britain, France, the United States, and 
Japan have preempted the islands anchored singly or in groups 
in the boundless stretches of the Pacific. The significance to be 
drawn from this chapter is that noted by Benjamin Kidd in his 
prophetic Control of the Tropics* published in 1898 : 

It is not even to be expected that existing nations will, in the fu- 
ture, continue to acknowledge any rights in the tropics which are not 
based both on the intention and the ability to develop these regions. 

In the treatment, under the title, Alien Enemy Property, of the 
claims of Germans whose property was sequestrated by the United 
States during the War, claims now adjusted by the "Settlement of 
War Claims Act" of March 10, 1928, some historical setting is 
added in order to show the relation between the World War legis- 
lation of the United States and the earlier trend of policy here 
and elsewhere ; for similar comparison an outline is given of cor- 

Wilhelm, The Soul of China; Paul Monroe, China, A Nation in Evolution; Ber- 
trand Russell, The Problem of China; Arthur N. Holcombe, The Chinese Revolu- 
tion; M. T. Z. Tyau, China Awakened. 
2 P. 47. 


responding measures taken by the countries allied in the War 
against the Central Powers. 

The major contributions of scholars to this year's volume are 
those of Professor H. F. MacNair of the University of Chicago, 
who prepared the chapter on the United States in the Pacific and 
Far East ; of Professor George H. Blakeslee of Clark University, 
who organized the material which was used in the chapter dealing 
with the post-Washington Conference relations of the United 
States and China, and whose unpublished manuscript was used in 
the Islands of the Pacific; of Professor R. D. McKenzie of the 
University of Washington, who prepared the chapter on Migra- 
tion in the Pacific Area; of Professor J. S. Burgess, late of 
Yenching University, Peking, who supplied the material and did 
the major part in preparing the chapter on the Emergence of 
Modern China, a chapter to which Grover Clark also gave sub- 
stantial assistance ; and of Dr. Ernst Correll of Washington, who 
furnished useful material for the chapter on Alien Enemy Prop- 
erty. The rest of the volume has been written by the director and 
the staff Martha Anderson; Doris H. Cochrane; Herbert B. 
Elliston, who gave particular attention to the chapters on eco- 
nomic relations in the section on the New Pacific, and on the 
Young Plan ; and David W. Wainhouse, to whom is mainly due 
the chapter on Limitation of Armaments. 

Help cordially given has been received from Professor James 
W. Angell, Philip Noel Baker, Professor Edward M. Borchard, 
H. B. Caton, Professor Joseph P. Chamberlain, J. B. Condliffe, 
Frank R. Eldridge, Mansfield Ferry, Judge F. C. Fisher, Pro- 
fessor Kenneth S. Latourette, Lewis Lorwin, Walter H. Mallory, 
Professor C. F. Remer, Nicholas Roosevelt, His Excellency 
Charalambos Simopoulos, Professor Nicholas J. Spykman, and 
Professor George Graf ton Wilson. 

C. P. H. 

New Haven, Connecticut , 
June 15, 1930. 


Section I. The New Pacific 1 

Chapter 1. The United States in the Pacific and Far East 5 

Beginning of Diplomatic Contact with China 7 

Acceptance of Chinese Jurisdiction 8 

Origin of Extraterritoriality 9 

Forcing a Wedge in Japan 17 

Maintenance of Chinese Unity 19 

First Treaties with Japan 19 

Treaties with China 22 

Burlingame Mission 28 

Alaska 26 

Treaty Revision 27 

Korea 29 

Japanese Expansion 30 

Korean Independence 31 

Open Door Policy 33 

The Boxer Rebellion 36 

American Policy Restated 37 

Foreign Encroachment 38 

Russia and Japan in Korea 39 

Manchuria 40 

United States Japanese Agreement 42 

Treaty of Portsmouth 43 

United States Influence in the Pacific 45 

Relations with Japan 46 

Root-Takahira Notes 47 

Investment of Foreign Capital 48 

Japanese Aggression 52 

Bringing China into the War 56 

Lansing-Ishii Notes 58 

Intervention in Siberia 60 

Political Settlements at the Peace Conference 63 

Chapter 2. The Emergence of Modern China 65 

The Orient and the Occident 65 

The Impact of Dynamic on Static 67 

Folkways 68 

Distribution of Population 70 

The Scholar Caste 72 


The West Goes East 77 

The Missionaries 79 

Other Foreign Pioneers 82 

Chinese Students Abroad 83 

Uses of Remitted Boxer Indemnities 84 

Effects of Western Education 86 

China Decides To Modernize 87 

Protest and Reconstruction 88 

Uneven Penetration 89 

Confusion of Aim 91 

Spreading Knowledge 93 

Education 95 

Labor 97 

Religion 99 

Communism 100 

The Students 102 

Political Evolution 103 

The Kuomintang 105 

Out of Medievalism 106 

In America 106 

Institute of Pacific Relations 108 

Increasing Study of Oriental Affairs 109 

Eastern and Western Culture 110 

Chapter 3. Post-War Pacific Diplomacy 112 

The Washington Conference 112 

The Anglo- Japanese Alliance 112 

Fortifications and Naval Bases 115 

The Treaty Relating to Island Possessions 117 

China at the Conference 121 

The Open Door 124 
Post Offices, Police, and Other Chinese Questions 127 

Shantung 129 

China since the Washington Conference 131 

Treaty Revision 131 

Chinese Aspirations New Method 132 

The Foreign Response 134 

The American Attitude 138 
The Nanking Outrage and United States Policy 138 

Renewal of Chinese Demands 142 

Revision under Treaty Clauses 145 
Rebus sic Stantibus and Article XIX of the 

Covenant 148 


Tariff Autonomy 150 

The Treaty Tariff 150 

The Tariff Conference of 1925 152 

The Washington Surtaxes 155 

Negotiating Tariff Autonomy 156 

The Japanese Position 157 

Likin 158 

Customs Administration 159 

The Problem of Shanghai 161 
The Development of the International Settle- 
ment 161 
Legal Status of the Settlement 166 
Contact between Chinese and Foreigners 169 
The Incident of 1925 171 
Organization of the Settlement 174 

Extraterritoriality 176 

The Treaty Terms 176 

Chinese Objections 177 

Steps toward Revision 178 

The Extraterritoriality Commission 179 

Negotiations with the Powers 182 

The Chinese Attempt to Expedite Action 187 

Provisional Court at Shanghai 189 
Relation of Extraterritoriality to the Settlement 

Question 192 

Extraterritoriality in Japan 193 

Extraterritoriality in Siam 194 

Notes on the Capitulatory Regimes in Turkey and Egypt 196 

Chapter 4. Economic Relations 201 

Period of Carrying 201 

Development of Pacific Trade 209 

The Rise of Japan 214 

The Treaty Port System 220 

Period of Commercial Leadership 222 

The Modern Factory System 222 

Effect on Character of Trade 230 

Volume of Trade with Japan and China 234 

American Investment in the Far East 238 

Japan as a Borrower 238 

The Consortium 243 
Government Debt and Business Investments 250 


Chapter 5. The Philippines in Pacific Relations 255 

Strategic Location 257 

The Island People 258 

Language 259 

Religion 260 

Early History 260 
Acquisition of the Philippines by the United 

States 263 

The Significance of the New Acquisition 267 
The International Nexus of Economic Interest 268 

Chapter 6. Islands of the Pacific 274 

European Rivalry in the Pacific 276 

The British in the Pacific 278 

Pitcairn Island 285 

The French in the Pacific 286 

Former Spanish and German Colonies 289 

Japanese Interests 290 

Islands of Uncertain Status 291 

American Interests in the Pacific 292 

Hawaii 295 

Hawaiian Products 302 

Guam, Wake, and Samoa 304 

Pacific Mandates 309 

Chapter 7. Migration in the Pacific Area 315 

Atlantic versus Pacific 318 

Settlement Areas 320 

White People in the Non-Caucasian Pacific 322 

Japanese Migration 323 

Net Immigration 326 

Age and Sex 326 

East Indian Migration 328 

The Philippine Islands 329 

Filipino Migration 330 

The British Dominions 333 

Australia and New Zealand 334 

Latin America 336 

Post Exclusion Migration 337 

Occupational Succession 341 


Section II. World Order and Coordination 343 

Chapter 1. Limitation of Armament 345 

The Preparatory Commission, 1928 345 

Disarmament vs. Security 345 

Naval Limitation 348 

Trained Land Reserves 350 

Method of Control 351 

The Soviet Proposals 352 

The Anglo-French Naval " Compromise" of 1928 356 

The Nature of the Bargain 356 

The Understanding as to Land Forces 363 

The Reception of the Compromise 364 

Washington 365 

Tokyo 367 

Berlin 368 

Rome 368 

The Fate of the Accord 369 

The Cruiser Bill 371 

The Hoover Proposals: A New Phase 376 

The German Demand 376 

The Hoover Demarche 378 

Naval Parity 379 

Land Effectives 381 

Armaments: Old Forces and New Factors 382 

The Economics of Armaments 382 

Security and Armaments 387 

The Peace Time Function of Armaments 394 

Note on Comparative Naval Strength 396 

Capital Ships and Aircraft Carriers 396 

Auxiliary Craft 398 

Cruisers 899 

Destroyer Types 400 

Submarines 400 

Chapter 2. The First Test of the Pact of Paris 404 

Section III. Post-War Financial Relations 427 

Chapter 1. The Young Plan 429 

Preliminary Negotiations 429 

Defining the New Attitude 430 

Restoration of Confidence 433 


Problem of Sanctions 434 

Appointment of Committee 437 

Germany's Ability to Pay 438 

Recovery of Germany 439 

The Transfer Problem 442 

State of Exports 445 

The Unanswered Question 449 

The Conference and the Plan 450 

Linking Debts with Reparations 451 

Claims of the Creditors 454 

Defining the Dawes Plan 456 

Summary of New Plan 459 

Accepting the Plan 461 

Role of the United States 464 

United States Interest in German Future 467 

Debts-Reparations Problem 469 

Note on the French Debt 474 

Chapter 2. War Credits and War Debt of Greece 477 

Chapter 3. Alien Enemy Property 482 

United States Policy before the World War 486 

Allied Action during the World War 490 
United States Action during the World War 493 
Metamorphosis of the Trading with the Enemy 

Act 496 
"Americanizing" German Patents 499 
United States Claims Obstruct Return of Prop- 
erty 502 
The Settlement of War Claims Act 505 
The Question of the Valuation of German Ships 506 
Notes on the Policies of Various Allied Powers and Colo- 
nies in Dealing with Sequestrated Enemy Property 508 
Great Britain 608 
Canada 510 
Australia 511 
New Zealand 511 
Union of South Africa 512 
India 512 
Egypt 513 
Anglo-Egyptian Sudan 513 
Western Samoa 513 
Japan 513 


France 514 

Monaco 515 

Italy 615 

Belgium 516 

Russia 516 

Guatemala 517 

Uruguay 517 

Honduras 517 

Haiti 517 

Siam 518 

China 518 

Appendix 520 

Index 523 



IT may be said that the function of a Survey of American For- 
eign Relations is to set forth the evolving relations between the 
United States and the various states with which it has to deal 
without attempting to expound their history, institutions, or cul- 
tures. National histories have been written and cultures are con- 
tinually being described. It is true that a comprehension of the 
culture and institutions of a nation increases the wisdom of those 
who have to deal with that nation or its people, as it is true that 
he of great understanding is slow to wrath. He would have a bet- 
ter understanding of European politics and of their consequences 
who knew the story of Lotharingia, the great undefined territory 
watered by the Saone, the Moselle, and the Meuse, and the 
struggles over it since the Verdun partition agreement of 843; 
and American opinion on problems of limitation of naval arma- 
ment would certainly be affected by a study of British institutions 
the rise of the Labour party and its absorption of the progres- 
sive "intellectuals," the subordination of the conservative and 
more nationalistic "Lords" to the greater international interests 
of manufacture and trade in the "Commons," and the devolution 
of the Empire of Victoria into the loose and anomalous organiza- 
tion called the British Commonwealth of Nations. 

In the case of China acquaintance with the people's ways is, in- 
deed, essential to a comprehension of its anomalous foreign rela- 
tions, for China resembles no other member of the sisterhood of 
nations in its history, in its institutional characteristics, or in the 
organization of its social and political life indeed, to use the 
term "organization" of the internal affairs of China is to come 
perilously near the lucus a non lucendo of description. China has 
never been what modern readers understand by the term "nation," 
but has been for some twenty-one hundred years a sort of "world- 
state" ; not equivalent to either the ancient Persian or the Roman 
Empire, but resembling them more than any modern state, with 
rudimentary but sufficient political institutions alongside of ma- 
ture, ethical, aesthetic-philosophical culture, and possessing with 
the life-tenacity of the amoeba the power to absorb foreign bodies 
without any interruption of the continuity of its essential exist- 


ence. The comparatively recent waning of that power creates one 
of the difficulties for the modern Chinese consciousness. 

In this China, embalmed like a bee in amber, a character of life, 
a set of mores, developed, became inveterate, and was sanctified by 
age into a religion. The successive founders of dynasties, whose 
energy made them masters of the enormous aggregation of village 
communities called China, left undisturbed these traditional values. 
Without some glimpse at these mores, without some understand- 
ing of Chinese "ways" which have persisted so long as not easily to 
be shaken off or dissolved, and which are obstacles to the forma- 
tion of a highly organized state and the discharge of those respon- 
sibilities exacted of any nation by modern international standards 
and international "law," without knowing something of the ten- 
sions created in the body of Chinese society by the resistance of 
the proved and worthy "old" to the irresistible, destructive, and 
creative "new," it is impossible to grasp the difficulties for Ameri- 
cans or Chinese in attempting to establish right relations between 
the two peoples, or even to follow the pattern of Sino- American 
relations that is woven upon "the roaring Loom of Time." This 
section attempts, therefore, especially in the second chapter, an 
outline sketch of some of the intimate ways of the Chinese, and of 
the evolution they are undergoing under the hammer impact of 
western civilization. 



IN the one hundred and forty-six years during which the citi- 
zens and government of the United States have had relations 
with the peoples and governments of the Pacific and Far Eastern 
areas, two policies are clearly disclosed: first to demand for 
United States citizens treatment no less favorable than that ac- 
corded those of any other government ; second, to give moral en- 
couragement and diplomatic aid to the nations of the Far East in 
the maintenance of their independence and administrative and 
territorial integrity. No body of American opinion has ever ques- 
tioned those policies, however singular it may seem for Americans 
who are alarmed at the idea of "entanglements" with Europe to be 
moved to enthusiasm for a Far Eastern policy compounded of 
quixotism on behalf of China and of concern for American trad- 
ing interests. In the long run the two policies are congruous, al- 
though the tradition of fostering a strong Asia runs the risk of 
jeopardizing American trade in an open competition ; the policy 
of fair field and no favor contains no guaranty that the propo- 
nent of the policy will occupy a favorable place in the race. 

In the Far East the United States has been faced by three 
possibilities, viz.: evasion of problems by withdrawal, develop- 
ment of its own policy with an ultimate use of force if necessary, 
and cooperation with the other interested Powers. The two last 
the United States has tried alternately. 1 Burlingame and Seward 
were strong exponents of cooperation with the European Powers. 
Later, in keeping with its policy of strengthening the nations of 
the East which showed any ability and will to help themselves, the 
United States turned toward Japan for cooperation. Against Eu- 
rope the United States aided Japan to strengthen itself, to free 
itself from foreign limitations upon its sovereignty as Japan 
demonstrated proof of its ability to play the part of a responsible 
Power in the family of nations a policy which did not gain 

i Cf. Tyler Dennett, Americans in Eastern Asia (1922), pp. v-ix. 


popularity for the United States with the European Powers hav- 
ing possessions in the East. Partly as a result of this and partly 
because of other conditions the United States found itself, toward 
the close of the century, isolated to a considerable degree in the 
East. This may account in part for the attitude of some of the 
Powers of continental Europe at the time of the Spanish-Ameri- 
can War, and undoubtedly explains in some degree the decision of 
the United States Government to hold the Philippine Islands, 
though the decision was in line with a slowly formed American 
policy of building up influence in the Pacific. Then came a return 
to cooperation with the European Powers and rising Japan ; an- 
nounced by Secretary Hay in 1899 as the open door policy, this 
was chiefly a restatement of most-favored-nation treatment. 

Until the beginning of the first Wilson administration in 1913, 
the policy of cooperation was generally adhered to although it 
received a setback at the time of the Knox neutralization pro- 
posal. Gradually it became clear that the Anglo-Japanese and 
other alliances were practically nullifying the policy, and with 
the opening of the World War the United States perforce fell 
back to play its hand alone; in 1917 an attempted return to co- 
operation is to be seen in the negotiation of the Lansing-Ishii 
Notes. Further evidence lies in the steps taken in 1918 to form 
a new consortium, and in the negotiations at Paris. A complete 
return was made at the Washington Conference where for the 
first time China itself was invited to cooperate. In the years which 
have passed since that Conference the United States has, in the 
main, cooperated with the other Powers. 

In the Pacific area as a whole three nations are in control: 
Japan, Great Britain, and the United States. The interests of 
France and the Netherlands are considerable but these nations 
have little influence; China and Russia are only potentially sig- 

The late Henry Morse Stephens divided Pacific history into 
four periods: (1) the first chapter opened with the arrival of 
Europeans at the beginning of the sixteenth century and lasted 
during the two hundred years of Spanish supremacy; (&) the 


second chapter was dominated by the conflict between European 
nations and ended with the occupation of the eastern coast line by 
Canada and the United States ; (3) the third chapter covered the 
greater part of the nineteenth century during which European 
nations made spasmodic attempts to secure Pacific footholds, and 
the power of new Japan rose; (4) the fourth chapter began with 
the completion of the Panama Canal, the closer contact between 
Europe and the Pacific introducing economic and political 
changes. 2 

Beginning of Diplomatic Contact with China. 

In all but the first era, the United States has played a part of 
no small significance. During the Jamestown period of Virginian 
history attempts were made to discover a route to the Pacific 
Ocean by way of the Chickahominy River ; before the Revolution 
Americans purchased ginseng from the Indians to exchange for 
China tea from British vessels, and in 1784 an American vessel, 
the Empress of China, sailed from New York to Canton with a 
cargo of ginseng. Its appearance at Whampoa, the anchorage 
for foreign vessels in the Canton River, coincided with that of 
the English ship, Lady Hughes. A shot fired from the latter in 
salute accidentally caused the death of a Chinese. In the diffi- 
culties which ensued Samuel Shaw, the supercargo of the Ameri- 
can vessel, cooperated heartily with the English, French, Dutch, 
and Danish for the protection of the Canton factories. Shortly 
after his return to New York, the Continental Congress showed 
its appreciation of his success in establishing direct trade with 
China by "electing" him as first United States merchant consul. 
Early in 1787 Shaw took up his duties at Canton, the only port 
open to foreign trade after the edict of 1757 had closed Amoy, 
Foochow, Ningpo, and the Formosan ports. 

In the China experience of Samuel Shaw appeared two prin- 
ciples which have been followed more or less consistently in 
American relations with respect to Pacific and Far Eastern coun- 

2 The Pacific Ocean in History, eds. H. Morse Stephens and Herbert E. Bolton, 
pp. 2S-63. 


tries: the policy of cooperation, and that of demanding for 
Americans most-favored-nation treatment. 

Acceptance of Chinese Jurisdiction. 

Within a short time American commerce with China was sur- 
passed only by that of the English. In Canton the position of 
Americans was a peculiar and on the whole a favored one. Unim- 
peded by any such organization as the English East India Com- 
pany, and spared (except for the years 1812-14) participation 
in the Napoleonic wars, the Americans were free-traders in a 
monopolistic world. They were left largely to fend for themselves. 
Until 1854 the United States was represented by merchant con- 
suls, when it had consular representation at all; in the case of 
Canton this was less than one-third of the time, and between 1806 
and 1815 Americans vainly petitioned Congress for the appoint- 
ment of a non-merchant consul who should have an official resi- 
dence and an adequate salary. The occasional appearance in Chi- 
nese waters of United States naval vessels caused the American 
merchants trepidations lest their trade be cut off by the Chinese 
officials upon whose favor they depended. With a zeal comically 
shrewd they tried to make clear to the Chinese the difference be- 
tween Americans and Englishmen; in this aim they enjoyed at 
least the moral support of their Government from the days of Jef- 
ferson to those of Van Buren. 

The degree to which Americans leaned upon Chinese authority 
and recognized the claims of China prior to 1844 is clearly mani- 
fested in two statements sent to Cantonese officials in the years 
1805 and 1821, respectively. Protesting to the governor of 
Canton against British search of American vessels in Chinese 
waters and impressment of seamen, the Americans declared 

that by the ancient and well established laws and usages of all 
civilized nations, the persons and property of friendly foreigners 
within the territory and jurisdiction of a sovereign and independent 
Empire, are under the special protection of the government thereof, 
and any violence or indignity offered to such persons or to the flag 
of the nation to which they belong, is justly considered as done to 
the government within whose territory the outrage is committed ; 


That by the same law of nations, the civil and military agents of 
the government are strictly prohibited from assuming any authority 
whatever within the territory of the other nor can they seize the 
person of the highest state criminal, who may have eluded the justice 
of their own ! 8 

At Canton, in September, 1821, Francesco Terranova, an 
Italian sailor on an American ship, was accused of causing the 
death of a Chinese woman; surrendered to the jurisdiction of the 
local officials he was given a trial which was a travesty of justice, 
and strangled. During the course of the affair, the Americans 
protested at the broken promises of the officials and the unfair 
trial but are reported to have admitted their acceptance of Chi- 
nese jurisdiction in the following (or similar) words: 

We are bound to submit to your laws while we are in your waters, 
be they ever so unjust. We will not resist them. You have, following 
your ideas of justice, condemned the man unheard. . . . It is no 
disgrace to submit to your power surrounded as we are by an over- 
whelming force, backed by that of a great empire. You have the 
power to compel us. 4 

Origin of Extraterritoriality. 

In the spring of 1839 it became clear that war between Eng- 
land and China was inevitable. A newly appointed imperial high 
commissioner acted vigorously to stop the opium trade, ordering 
all foreigners to remain inside the factories. After several weeks 
the Americans determined to memorialize Congress for assistance. 
Reviewing the opium situation, and expressing disapproval on 
moral and economic grounds, they respectfully advocated govern- 
mental action 

in concert with the Governments of Great Britain, France, and Hol- 
land, or either of them, in their endeavors to establish commercial 
relations with this empire upon a safe and honorable footing, such 
as exists between all friendly powers; and, by direct appeal to the 

s Quoted by Dennett, op. cit., p. 84. 

4 North American Review, XL (1835), 66. This appears not to be a direct 
quotation but rather a summary of the statement to the Chinese made by the 
Americans in response to an inquiry regarding their intention to resist the Chi- 
nese by force. 


Imperial Government at Peking, to obtain compliance with the fol- 
lowing among other important demands: 

1st. Permission for foreign envoys to reside near the court of 
Peking on the terms and with all the privileges accorded at other 
courts. . . . 

2d. The promulgation of a fixed tariff of duties . . . regulations 
permitting the transshipment of such goods as it may be desirable 
to re-export for want of a market in China. . . . 

4th. The liberty of trading at other port or ports in China than 
that of Canton. 

5th. Compensation for the (recent) losses . . . and security for 
the free egress from Canton, and other ports, of all persons not 
guilty of crimes or civil offenses, at any and at all times. 

6th. That until the Chinese laws are distinctly made known and 
recognized the punishment for wrongs committed by foreigners upon 
the Chinese, or others, shall not be greater than is applicable to the 
like offense by the laws of the United States or England ; nor shall 
any punishment be inflicted by the Chinese authorities upon any 
foreigner, until the guilt of the party shall have been fairly and 
clearly proved. 

The sending of 

an agent or commission . . . with a sufficient naval force to protect 
our commerce and our persons ... as well as to secure a partici- 
pation in any privileges which this Government may hereafter be 
induced to concede to other powers 

was urged. In conclusion the American merchants expressed their 

candid conviction that the appearance of a naval force from the 
United States, England, and France, upon the coast of China, 
would, without bloodshed, obtain from this Government such ac- 
knowledgments and treaties as would not only place our commerce 
upon a secure footing, but would be mutually beneficial, and greatly 
increase the extent and importance of our relations with this empire. 6 

This document and subsequent actions show that the English 
and the Americans in the China trade were in essential agreement 
as regarded a solution of the problems which both were facing on 
the China coast. Both wanted to shift the center of diplomatic 

c House Doc. 40: 26-1. 


negotiations from Canton ; both wanted fixed tariffs and a cessa- 
tion of dickering and palm-greasing as well as the opening of 
new ports ; both wanted to pursue peaceful measure^ for the pro- 
tection and development of trade, which they held was as ad- 
vantageous to the Chinese as to themselves, but they believed in 
the governmental use of force if nothing else would serve. Con- 
sciously or unconsciously following the precedent set by Samuel 
Shaw in 1784, the Americans on the scene of action, far removed 
from domestic politics, advocated a policy of peaceful coopera- 
tion with England. Most significant of all was the changed atti- 
tude which had come in the eighteen years since the Terranova 
affair. Extraterritoriality itself was not suggested, but out of the 
thought made manifest in the memorial of 1839, and the incidents 
which lay back of the thought, grew that solution at which Caleb 
Gushing arrived in 1844. 

During the course of the first Anglo-Chinese War such Ameri- 
can sympathy as was expressed was mostly with China. On March 
16, 1840, Gushing, after referring to the memorial from Canton, 
prayed that he might be divinely prevented from entertaining 

the idea of cooperating with the British Government in the purpose, 
if purpose it has, of upholding the base cupidity and violence and 
high-handed infraction of all law, human and divine, which have 
characterized the operation of the British, individually and collec- 
tively, in the seas of China. 6 

On this display of conscious virtue Mr. Dennett dryly comments : 

Thus began the myth in the United States, at a time when the 
Americans at Canton were riding rough-shod over Commissioner 
Lin's embargo on English trade, and smuggling the English cargoes 
for the season, both in and out of the port, that the American in 
China was an angel of light. 

At least one member of Congress was able to forget for a time 
Anglo-American grievances and to look beneath the surface of 
events in China. In a lecture on the War with China, delivered in 
December, 1841, before the Massachusetts Historical Society, 

6 Quoted by Dennett, op. cit., p. 104. 


John Quincy Adams reviewed Chinese policy and foreign rela- 
tions : 

The fundamental principle of the Chinese empire is anti-commer- 
cial. ... It admits no obligation to hold commercial intercourse 
with others. It utterly denies the equality of other nations with it- 
self, and even their independence. It holds itself to be the centre of 
the terraqueous globe . . . and all other nations with whom it has 
any relations, political or commercial, as outside tributary bar- 
barians reverently submissive to the will of its despotic chief. It 
is upon this principle, openly avowed and inflexibly maintained, that 
the principal maritime nations of Europe for several centuries, and 
the United States of America from the time of their acknowledged 
independence, have been content to hold commercial intercourse with 
the empire of China. . . . Britain has the righteous cause. . . . 
The opium question is not the cause of the war. . . . The cause of 
the war is the kowtow! the arrogant and insupportable preten- 
sions of China, that she will hold commercial intercourse with the 
rest of mankind, not upon terms of equal reciprocity, but upon the 
insulting and degrading forms of the relation between lord and 
vassal. 7 

Adams' remarks on this occasion were no more popular than 
those of Balaam to Balak on the occasion of his blessing of the 
Israelites; American editors, sensitive to the prejudices of the 
masses, hesitated to publish Adams' remarks, as their successors 
hesitated to print accounts of the Nanking outrage of 1927. 
Nevertheless these views did not greatly differ from the line taken 
by the Tyler administration in the explicit directions of Secre- 
tary of State Webster to Gushing when the latter was chosen two 
years later to negotiate a treaty with China, the one in close touch 
with the Boston firms and their representatives in Canton and the 
other guided by the advice of the merchants at Macao. Gushing 
was by no means to allow himself to be ranked in China as a "trib- 
ute-bearer" and, although he was to recognize the laws and com- 
mercial regulations of China, he was "to assert and maintain, on 
all occasions, the equality and independence of [his] own coun- 

T Chinese Repository, XI, 274-289. 


From the days of Samuel Shaw most-favored-nation treat- 
ment had been the object of the policies of American residents 
in China and of their Government at home. The Americans 
differed from the English mainly in being willing to cooperate 
in the maintenance of the status quo. After the dissolution of 
the East India Company monopoly there was no one to regu- 
late the British adventurers in Canton, and they made trouble; 
the Americans could wait, and were willing to do so rather than 
to run the risks involved in upsetting the status quo, especially 
as they profited by the ill-will which the British engendered 
among the Chinese. At this time the new-world spirit of ad- 
venture was less noticeable than the Yankee desire for gain. 

Shortly after the signing of the Treaty of Nanking and be- 
fore he knew of it, the American Commodore, Kearny, re- 
quested assurance from the Manchu governor of Kwangtung 
that American citizens should "be placed upon the same foot- 
ing as the merchants of the nation most favored." 8 Such an assur- 
ance he received from Kiying, governor of Canton, in this urbane 
form : 

Decidedly it shall not be permitted that American merchants 
shall come to have merely a dry stick (that is, their interests shall 
be attended to). I, the Governor, will not be otherwise disposed 
than to look up to the heart of the great Emperor in his compas- 
sionate regard toward those men from afar, that Chinese and for- 
eigners with faith and justice may be mutually united, forever enjoy 
reciprocal tranquillity, and that it be granted to each of the resi- 
dent merchants to obtain profit, and to the people to enjoy life and 
peace, and universally to participate in the blessings of great pros- 
perity, striving to have the same mind. 9 

Early in 1843 the Commodore seized the opportunity to state 
that his Government would "demand" for its merchants what- 
ever was granted by the emperor "to the traders from other 
countries." 10 The formal incorporation of the principle which 
motivated both English and Americans is to be found in Ar- 

* Sen. Doc. 130: 29-1, p. 21. Dennett, op. cit. f pp. 108-109. 

10 Ibid., p. 109. 


tide VIII of the Anglo-Chinese Treaty of the Bogue, October 
8, 184$, which reads in part: 

. . . should the Emperor hereafter, from any cause whatever, be 
pleased to grant additional privileges or immunities to any of the 
Subjects or Citizens of such Foreign Countries, the same privileges 
and immunities will be extended to and enjoyed by British sub- 
jects. . . . xl 

Cushing's main object in China was by the negotiation of a 
treaty to insure permanently for American traders as good treat- 
ment as that thus assured the English. The American envoy 
landed in Macao on February 24, 1844. On June 16, while he was 
still waiting to begin negotiations, a group of Americans at Can- 
ton, attacked by a mob, was forced to use firearms in self-defense ; 
a Chinese was killed. Reversing the precedent established twenty- 
three years earlier in the Terranova case, Gushing refused to sub- 
mit the case to the jurisdiction of China. Since the roots of extra- 
territoriality, as far as the United States is concerned, are to be 
found in Cushing's letter to the American consul at Canton on 
this occasion, it is worthy of quotation. 

The nations of Europe and America form a family of States, 
associated together by community of civilization and religion, by 
treaties, and by the law of nations. 

By the law of nations . . . every foreigner, who may happen to 
reside or sojourn in any country of Christendom, is subject to the 
municipal law of that country, and is amenable to the jurisdiction 
of its magistrates on any accusation of crime alleged to be com- 
mitted by him within the limits of such country. . . . 

In the intercourse between Christian States on the one hand, and 
Mohammedan on the other, a different principle is assumed, namely, 
the exemption of the Christian foreigner from the jurisdiction of the 
local authorities, and his subjection (as the necessary consequence) 
to the jurisdiction of the minister, or other authorities of his own 

One or other of these two principles is to be applied to the citi- 
zens of the United States in China. ... In my opinion, the rule 

11 Treaties, Conventions, etc., Between China and Foreign States, Published 
at the Statistical Department of the Inspectorate General of Customs, I, 898. 


which obtained in favour of Europeans and Americans in the Mo- 
hammedan countries of Asia is to be applied to China. Americans 
are entitled to the protection and subject to the jurisdiction of the 
officers of their government. 12 

Not until July 3, and after he had expressed himself in cor- 
respondence with the acting viceroy of Kwangtung "with ex- 
treme plainness and frankness" and relieved himself, as he 
reported, of "all the harsh things which needed to be said, 55 did 
Gushing succeed in signing a treaty at Wanghia, near Macao. 
Article II provides the safeguard sought : 

Citizens of the United States resorting to China for the purpose 
of Commerce will pay the duties of import and export prescribed by 
the Tariff. . . . They shall in no case be subject to other or higher 
duties than are or shall be required of the people of any other na- 
tion whatever. . . . And if additional advantages or privileges of 
whatever description be conceded hereafter by China to any other 
nation, the United States and the citizens thereof shall be entitled 
thereupon to a complete, equal, and impartial participation in the 

In Articles XXI and XXV was incorporated the principle of 
extraterritoriality : 

Subjects of China who may be guilty of any criminal act toward 
citizens of the United States shall be arrested and punished by the 
Chinese authorities according to the laws of China, and citizens of 
the United States who may commit any crime in China shall be sub- 
ject to be tried and punished only by the Consul or other public 
functionary of the United States thereto authorized according to 
the laws of the United States. . . . 

. . . All questions in regard to rights, whether of property or 
person, arising between citizens of the United States in China shall 
be subject to the jurisdiction of and regulated by the authorities of 
their own Government. . . . 18 

In negotiating his treaty Gushing had an opportunity to insist 

12 H. F. MacNair, Modern Chinese History, Selected Readings, pp. 60-61. 
The general principle of extraterritoriality is treated on pp. 176-193. 
is Treaties, etc. (see footnote 11), I, 677-690. 


upon the recognition of national equality. In his first dispatches, 
Kiying, the Manchu negotiator, raised the name of China and its 
ruler two spaces and that of the United States one space. Gushing 
at once returned the paper, stating to Kiying his 

belief that Your Excellency will see the evident propriety of ad- 
hering to the form of national equality, the observance of which is 
indispensable to the maintenance of peace and harmony between the 
two governments, whose common interests recommend that each 
should treat the other with the deference due to great and powerful 
independent states. 

Permanent recognition of the principle of national equality was 
given by the provision (Article IV) for official intercourse be- 
tween officials of the two countries of corresponding rank on a 
basis of equality. 

In the Treaty of Wanghia are incorporated the principles 
which had been taking shape in the minds of Americans, official 
and nonofficial, for two generations and which were to become 
more and more definite in the course of the nineteenth and twen- 
tieth centuries: national equality, the determination of Ameri- 
cans to be treated as the equals of any people on earth; with 
equality must come also most-favored-nation treatment, political 
as well as commercial. 

But there was another side to the question: if the westerners 
in the East had rights, they had obligations also. Washington 
looked with disapproval upon seizure of territory or other at- 
tacks upon the independence of China (and later of Japan and 
Korea). It became American policy to support Asiatic nations 
in their struggles to maintain their independence ; along with this 
developed a tendency to hold the governments of these lands 
responsible for carrying on administrative duties with relation 
to other nations. Accordingly while opium was specifically de- 
clared in the Gushing treaty to be contraband and its importation 
into China by Americans penalized by confiscation of vessel and 
cargo, the enforcement of this provision was left to China. Prima 
facie the policy appeared worthy of praise ; but China's inability 
to enforce its own sovereign desires was demonstrated by the 


events of the next few years, and the unsuitability of the Ameri- 
can policy to Chinese conditions became evident. 

Americans might have enjoyed at least theoretically na- 
tional equality, most-favored-nation treatment, and the rights of 
extraterritoriality without a treaty ; but they would not have had 
an opportunity to put into play their slowly forming policy of 
encouraging the Chinese to maintain their independence, nor 
would they have been able to find a complete equivalent for a 
military and naval base such as Hong-kong, which had been ceded 
to Great Britain by the Treaty of Nanking in 1842. The United 
States wanted no territory, but most-favored-nation treatment 
called for an equivalent; this was in part gained by the definite 
provisions for most-favored-nation treatment and extraterri- 
toriality in the Gushing treaty, but especially in the incor- 
poration of provisions for trade along the China coast from one 
treaty port to another, out of which largely grew the foreign 
coastwise trade against which the Chinese have in recent years 
begun to protest. 

In the negotiation Gushing called upon two distinguished 
American missionaries, Dr. Peter Parker and the Rev. E. C. 
Bridgman, to serve as interpreters. This fact explains the inser- 
tion of a provision (Article XVIII), declaring it 

lawful for officers or citizens of the United States to employ scholars 
and people of any part of China, without distinction of persons, to 
teach any of the languages of the Empire, and to assist in literary 
labours, and the persons so employed shall not for that cause be 
subject to any injury on the part either of the Government or of 
individuals ; and it shall in like manner be lawful for citizens of the 
United States to purchase all manner of books in China. 

Forcing a Wedge in Japan. 

During the middle years of the nineteenth century, a deter- 
mination was growing to enter into treaty relations with Japan 
and to force, if necessary, that mysterious country to accept its 
responsibilities as a member of the family of nations. One of the 
chief reasons for the interest of the United States in both Hawaii 
and Japan was a desire for protection of American whalers in the 


northern Pacific and of Americans engaged in Pacific and Far 
Eastern trade from the dangers of shipwreck as well as of ill- 
treatment in case they were forced to land on the inhospitable 
shores of Japan, but it was also important to be able to obtain 
supplies, especially coal. 

When Matthew Galbraith Perry, with four war vessels, ap- 
peared in the Bay of Yedo (Tokyo) on July 8, 1853, he intended 
to secure from Japan three concessions: protection of the per- 
sons and property of shipwrecked Americans ; the opening of one 
or two ports to trade ; the establishment of a coaling station. Ex- 
perience of United States nationals during two generations 
throughout the area under discussion had convinced them, and 
at last their Government, that gentle speech and good wishes un- 
accompanied by a convincing show of force were of little use. Ac- 
cordingly the Japanese were to be assured of the President's de- 
sire for the friendship of the Emperor but that "no friendship can 
long exist between them unless Japan should change her policy 
and cease to act towards the people of the United States as if they 
were her enemies." If peaceful arguments availed naught, Perry 
was to "change his tone" and inform the Japanese "in the most 
unequivocal terms" that the United States Government would in- 
sist upon humanitarian treatment for its citizens and that "if any 
acts of cruelty should hereafter be practiced . . . whether by the 
Government or the inhabitants of Japan, they will be severely 
chastised." 14 

Perry was no less determined than Gushing to insist upon the 
full equality of his country with that of any in the world. He in- 
sisted upon the acceptance in correct manner of President Fill- 
more's letter; having announced his plan to return, with aug- 
mented squadron, the following year to receive an answer, he 
sailed to the Liuchiu Islands to arrange for coal for his ships. 
Thence he dispatched one of his commanders to take possession of 
part of the Bonin Islands, five hundred miles south of the main 
Japanese island. To the Bonins the United States laid vague 
claim until 1873. 

14 Dennett, op. cit. f pp. 263-264. 


Maintenance of Chinese Unity. 

In China contemporaneously another American Commissioner, 
Humphrey Marshall, was pursuing a milder policy, a logical 
extension of that enunciated in treaty form by Gushing. Marshall 
and Perry differed in policy and method but were one in suspi- 
cion of Great Britain and in desire to block its expansion. In the 
period 185165 when China was ravaged by the T'aip'ing and 
other rebellions and the imperial house and the unity of China 
were seriously threatened, the position of the western Powers 
with reference to China became crucial. Marshall feared the 
disintegration of Chinese unity and, in particular, the establish- 
ment of British and Russian protectorates in south and north 
China respectively. While anxious to avail himself of every op- 
portunity which might be presented for opening China to in- 
creased intercourse, and adhering to the Washington policy of 
avoiding intervention in China's domestic affairs, he felt pro- 
foundly the need of a program which should bolster China 
against its own weakness and European encroachment, that is, 
maintenance of the doctrines of the most-favored-nation and the 
open door. The policy was not primarily altruistic even though 
it was for the best interests of China; the absorption by Euro- 
pean Powers of the units of a disintegrated China would exclude 
Americans from Chinese markets. The recognition of this possi- 
bility is shown by Secretary Marcy's instructions to Commissioner 
Marshall's successor, Robert M. McLane, that in the event of the 
disruption of China he should enter into treaty relations with all 
the resulting units. 

First Treaties with Japan. 

In his attempts to aid the Manchu government against its 
T'aip'ing enemies, Marshall requested the aid of Commodore 
Perry and his squadron; this Perry refused, nor would he act 
on the suggestion of the Russian Admiral, Count Putiatin, that 
they should evolve a policy of cooperation. Perry spent the 
winter of 1853 at Hong-kong and Macao and reappeared in 
Yedo Bay in mid-February of the following year. He knew of 
Russia's plans to enter into treaty relations with Japan and he 


believed a French squadron would soon appear. His intention of 
making the first treaty necessitated haste. On March 31, a treaty 
between Japan and the United States was signed at Kanagawa. 
For more than two hundred years Japan had kept its doors 
closed, maintaining only a tiny window at Deshima in Nagasaki 
Harbor for trade with a few Dutch and Chinese. Under the pres- 
sure of potential force it now agreed to swing open its doors 
again. The treaty provided for trade at Shimoda and Hakadate, 
neither of which had a favorable location; an agent or consul 
might be stationed at Shimoda after the passage of eighteen 
months, but at neither could Americans permanently reside; no 
arrangements for coal were made, and the rules for trade were 
rigid. The most-favored-nation clause was included, but no pro- 
vision for extraterritoriality was made. Perry's treaty was nar- 
rower in scope than Cushing's treaty with China of a decade 
previous, but this was due to foresight; his ubiquitous Pacific 
policy would require time, and others might at leisure fill in the 
gaps left in his treaty. 

The gaps were filled in by the brilliant work of Townsend 
Harris, first consul general and, later, first United States min- 
ister to Japan. In 1857 he negotiated a convention and in 1858 
a commercial treaty which until 1894? remained the key treaty 
with Japan. In the former was a provision for the enjoyment by 
American citizens of extraterritorial rights which had been 
stipulated for by the Russians and Dutch in their respective 
treaties of 1855 and 1856. Arrangements were made for the 
opening of more ports and for permanent residence therein with 
the right to lease land and erect buildings, and for a conventional 

The years following the signing of the treaties were full of 
strain for Minister Harris: the Japanese were in the midst of 
a domestic revolution and among them were groups violently 
antiforeign, bent on expelling all westerners and doing away 
with the treaties. It was more than possible that the European 
Powers might resort to war in defense of their rights and that 
partition of Japan might result. Following a series of murders 
of westerners, including the interpreter of the United States 


legation, the English, French, Dutch, and Russian representa- 
tives in Yedo withdrew early in 1861 to Yokohama, but Harris 
refused to accompany them. As Gushing and Marshall in China 
were working for the integrity of China and the holding of that 
country to its obligations as a sovereign state, so Harris was bent 
on giving every moral aid possible to Japan in its struggle to 
save itself ; he too worked to hold the Japanese Government to a 
performance of its international obligations. 

With the retirement of Harris and the waging of the Civil 
War in the United States the leadership of the western diplomats 
passed to Great Britain. Robert H. Pruyn, Harris' successor, was 
instructed by Secretary of State Seward 

to preserve friendly and intimate relations with the representatives 
of other Western powers in Japan. You will seek no exclusive ad- 
vantages, and will consult freely with them upon all subjects, inso- 
much as it is especially necessary, at this time, that the prestige of 
Western civilization be maintained in Yedo as completely as pos- 
sible. 15 

The United States Minister accordingly joined the representa- 
tives of Great Britain, France, and the Netherlands in signing a 
protocol on May 30, 1864, stating their decision to act in con- 
cert upon their treaty rights. In August the Americans par- 
ticipated in the Allied attack on the Choshu feudatory which 
had for its objects the opening of the Straits of Shimonoseki and 
the vindication of foreign treaty rights against attempts to ignore 
or abolish them. President Lincoln and Secretary Seward ap- 
proved American participation in this move to cooperate with the 
European Powers. On June 25, 1866, the representatives of the 
United States, Great Britain, France, and the Netherlands signed 
a joint tariff convention with Japan by which the revision of 
duties was made dependent upon the approval of any one or all 
the treaty Powers. There was no parallel in China to this instance 
of American cooperation, and from it later administrations slowly 

is Diplomatic Correspondence, 1862, Part II, p. 818. 


Treaties with China. 

United States policy and actions, and those of its representa- 
tives, were less clear-cut in China during these years than in 
Japan. While the Peking government was faced by the T'aip'ing 
rebellion and other serious domestic problems the matter of treaty 
revision came up ; the American, French, and British envoys were 
ordered by their respective governments to cooperate in raising 
this question, but they were not to bring about a war. 

Dr. Peter Parker became United States Commissioner to China 
in 1855. Convinced by experience with Chinese pride, evasion, 
and procrastination, and by the failure of a cooperative effort, 
that force alone would bring the Manchu emperor to consent to 
revision, Parker in December, 1856, proposed to Secretary 
Marcy that France, England, and the United States cooperate in 
seizing positions in Korea, the Chusan Archipelago, and For- 
mosa, which should be held until China should meet the wishes of 
the cooperating Powers. To this Secretary Marcy replied that 
there was no warrant for the form of cooperation suggested, and 
that while the United States naval forces might be augmented to 
protect the persons and property of American citizens in China, 
they would not be used for "aggressive purposes." In February 
and March, 1857, Parker advocated the seizure of Formosa in 
reprisal for Peking's sins of omission and commission; no reply 
was vouchsafed. 

In May, 1857, William B. Reed succeeded Parker as United 
States representative in China, receiving the title of Envoy Ex- 
traordinary and Minister Plenipotentiary. His instructions spe- 
cifically warned him against a policy of "territorial aggrandize- 
ment or the acquisition of political power" ; he was instructed to 
make it clear that the objects of the United States in China were 
trade "under suitable guarantees for its protection." Mr. Reed's 
experiences and observations in China quickly changed his point 
of view from that of the cool detachment characteristic of the 
State Department, and he wrote to Secretary Cass that the 
"powers of Western civilization must insist on what they know to 
be their rights, and give up the dream of dealing with China as 


a power to which any ordinary rules apply." In response to his 
later request for authority to coerce Peking, he was informed 
that although cause existed there would be no resort to hostilities. 
Forbidden to join with England and France in coercive meas- 
ures, he was free to cooperate diplomatically, and after the fall 
of Canton to the allied forces early in 1858, he joined the rep- 
resentatives of England, France, and Russia in notes to Peking. 
A few months later he attempted to enter upon independent 
negotiations but was disappointed. The representatives of the 
four Powers pushed on to Tientsin where, during the month of 
June, 1858, they signed treaties with China, the American in- 
cluding the most-favored-nation clause. The English were deter- 
mined that their representative should be accorded the right of 
residence in Peking and be treated as the representative of a 
Power equal in rank with China. On this point Reed stipulated 
that the American representative should have the right to go 
thither on particular business (but not on "trivial occasions") 
and while there he was to be treated as an equal; if the right of 
residence in the capital should be accorded the representative of 
any Power it should at once be extended to the United States. 
Toleration of Christianity was also provided. Opium was not 
mentioned, but owing largely to the stand taken by Reed and 
Lord Elgin, British ambassador extraordinary, the opium trade 
was shortly afterward legalized without objection by either the 
United States Government or people. 

Burlingame Mission. 

By July, 1862, when Anson Burlingame, President Lincoln's 
choice as American Minister to China, arrived in Peking, he found 
the English, French, and Russian envoys established in their 
legations, the right of treaty power representatives to residence 
there having been conceded as a result of the war of 1860. Bur- 
lingame, largely by virtue of a vigorous and magnetic per- 
sonality, quickly became the outstanding western diplomat in 
the Chinese capital. He received a free hand from Secretary 
Seward who merely urged him to "consult and cooperate with 
the British and French ministers, unless in special cases there 


should be satisfactory reasons for separating from them." This 
advice was not new, but the opportunity for acting upon it for 
peaceful objects and the welfare of China was greater than 
hitherto. Burlingame was, moreover, a practical altruist as none 
of his predecessors had been. After consulting at length with 
his diplomatic colleagues in Peking the United States Minister 
defined their policy as follows : 

. . . while we claim our treaty right to buy and sell, and hire, in 
the treaty ports, subject, in respect to our rights of property and 
person, to the jurisdiction of our own governments, we will not ask 
for, nor take concessions of, territory in the treaty ports, or in any 
way interfere with the jurisdiction of the Chinese Government over 
its own people, nor ever menace the territorial integrity of the Chi- 
nese Empire. That we will not take part in the internal struggles in 
China, beyond what is necessary to maintain our treaty rights. 
That the latter we will unitedly sustain against all who may violate 
them. . . , 16 

Both Burlingame and Seward realized that so idealistic a 
policy could be maintained only so long as its supporters re- 
mained in the Chinese capital, unless the great Powers would 
unanimously support it from their home offices. With the hope 
of effecting this, Burlingame resigned his post in November, 
1867, to accept an appointment as head of a mission to the 
Powers. On the arrival of this mission in Washington, Secretary 
Seward drafted eight articles to supplement the Treaty of 
Tientsin which are known as the Burlingame Treaty of July 28, 
1868. 17 These articles make clear United States policy toward 
China at that period and long after. Article I provided for 
the territorial integrity of China by recognizing its dominion 
over "certain tracts of land" or "certain waters" to which for- 
eigners had been granted access for residence and trade. China's 
"right of jurisdiction over persons and property" in any area 
which had been or might be granted to the United States for 
purposes of residence or trade was also provided, a limitation 
upon extreme pretensions of extraterritorial rights in concessions 

ie Diplomatic Correspondence, 1863, Part II, p. 939. 
17 Treaties, etc. (see footnote 11), I, 525. 


and international settlements. Inland trade and navigation were 
reserved to China by Article II. Appointment of Chinese consuls 
to the United States who should be treated as well as British and 
Russian consuls was arranged by Article III. Freedom of con- 
science for American citizens in China and for Chinese Christians 
in both China and the United States was promised by Article IV. 
Free (but not contract) immigration into the United States was 
provided in Article V. Most-favored-nation treatment for Ameri- 
cans in China and Chinese in the United States was guaranteed 
in Article VI, "but nothing therein contained shall be held to 
confer naturalization upon citizens of the United States in China 
nor upon the subjects of China in the United States." Reciprocal 
educational rights were agreed to in Article VII: "The citizens 
of the United States may freely establish and maintain schools 
within the Empire of China at those places where foreigners are 
by treaty permitted to reside. ..." 

By Article VIII the United States Government stated its de- 
termination not to intervene "in the domestic administration of 
China in regard to the construction of railroads, telegraphs, or 
other material internal improvements"; should China, however, 
request the services of engineers at any time the United States 
agreed to designate them. The main object of the Burlingame 
mission in the eyes of those who dispatched it was to persuade the 
Powers not to bring pressure upon China to modernize the coun- 
try rapidly. As far as the United States was concerned this ob- 
ject was attained in Article VIII, and was considered by the 
Chinese and Manchus of most value. The way was also further 
prepared for the sending of foreign advisers to aid the Chinese 

The immediate effect of the Burlingame mission and treaty was 
to weaken, if not to sentimentalize, American policy in China. 
Burlingame's successor as United States Minister to China, 
J. Ross Browne, felt that the ground had been cut from under 
his feet. Of the school of thought of Caleb Gushing, he did not 
advocate the exploitation of China but neither did he believe in 
coddling it; he believed that for its own good, as well as for 
America's, China must be held strictly accountable in respect of 


treaties. Browne's criticisms of his Government's policy resulted 
in his recall in 1869. His successor, F. F. Low, profited as much by 
Browne's policy as Browne had suffered from Burlingame's. 
President Grant's Secretary of State, Hamilton Fish, in instruct- 
ing Low, wrote in December, 1869 : 

You will make clear to the government to which you are ac- 
credited the settled purpose of the President to observe with fidelity 
all the treaty obligations of the United States and to respect the 
prejudices and traditions of the people of China when they do not 
interfere with rights which have been acquired to the United States 
by treaty. On the other hand you will not fail to make it distinctly 
understood that he will claim the full performance, by the Chinese 
Government, of all the promises and obligations which it has as- 
sumed by treaties or conventions with the United States. On this 
point, and in the maintenance of our existing rights to their full 
extent, you will be always firm and decisive. 18 


Under Presidents Lincoln and Johnson, William H. Seward 
was Secretary of State. No earlier occupant of this office had had 
the prophetic outlook over the Pacific and Far Eastern area 
which characterized Seward. As a member of the United States 
Senate he had declared that "the Pacific Ocean, its shores, its 
islands, and the vast region beyond will become the chief theatre 
of events in the world's great hereafter." His regime was marked 
not only by a foresight of the significance of the Pacific area and 
by a strengthening of American interests in the Far East but by 
a notable advance in the North Pacific area. His imagination 
conceived and his vigorous temperament planned the admission of 
California to the Union, the building of a transcontinental rail- 
road, the inauguration of a line of steamers from San Francisco 
to Japan and China via Honolulu, the policy of cooperation with 
the western Powers in dealing with Japan, Korea, and China 
along with the development of commercial opportunities in east- 
ern Asia ; to such largeness of scope his successors could make no 
substantial additions. The expansive tendency in the Pacific which 

is For. Rel, 1870-71, p. 803. 


culminated in the taking over of the Philippines in 1898 was in- 
augurated by Seward in the purchase of Alaska. 

An attempt on the part of Russia in 1821 to exclude non-Rus- 
sians from the Bering Sea and from its North American posses- 
sions, and a later demand that Russia should control all the 
Pacific north of the fifty-first parallel had resulted in a treaty 
between the United States and Russia in 1824$ limiting Russia's 
pretensions and recognizing the North Pacific as part of the high 
seas, the United States agreeing not to colonize north of 54 40'. 
Between 1820 and 1867 Alaska became increasingly an economic 
liability to Russia with a political and military risk of its loss by 
seizure ; Russia feared, moreover, the loss of American friendship 
which was more valuable than Alaska. To the United States the 
acquisition of Alaska and the Aleutian Archipelago would give a 
strategic position in the North Pacific which it had thitherto con- 
spicuously lacked; it would also bring the country into greater 
proximity with eastern Asia. An informal offer of $5,000,000 in 
1858 was declined by Russia as too small. On March 30, 1867, 
Secretary Seward was able to negotiate a treaty with Baron 
Stoeckl, the Russian Minister at Washington, for the purchase of 
Alaska and the Aleutians for $7,200,000. The treaty was ratified 
by the Senate on April 9, and the ceremony of transfer took place 
on October 18 at Sitka. 

Treaty Revision. 

During the first period of treaty-making between Japan and 
the western Powers, 1854-62, a policy of cooperation had been 
carried out under the leadership of Townsend Harris. With the 
latter 's retirement and during the years 186273, the cooperative 
policy was continued in general under the somewhat arbitrary 
leadership of the English diplomats in Tokyo, Sir Rutherford 
Alcock and Sir Harry Parkes. The United States Government 
had little influence, nor did the cooperative policy work for the 
welfare of Japan. In 1873 John A. Bingham reached Tokyo to 
serve as United States minister, and at once sought to regain for 
his country the position it had held when Townsend Harris was 
minister. Thoroughly disapproving of the cooperative policy, he 


decided, to the irritation and disgust of his German and British 
colleagues, to aid Japan to revise its treaties with the Powers. 
On July 25, 1878, Japan signed a treaty with the United States 
at Washington, by which the cooperative policy was partially 
abrogated. This treaty was, in part, the model for the treaty of 
1928 with China, the two situations offering a number of paral- 
lels. The United States recognized the exclusive right of Japan 
to control its coasting trade and its tariff ; in return, Japan was 
to open two additional ports, and export duties were to be abol- 
ished concessions which were not to be granted to another Power 
unless it should grant to Japan what the United States had 
granted but the treaty was not to go into effect unless Japan 
should sign similar treaties with other nations. Under the leader- 
ship of Great Britain and Germany the other European govern- 
ments refused to sign similar treaties and thus prevented that of 
1878 from coming into effect. American prestige in Tokyo 
nevertheless rose apace, and Japan was encouraged to press on to 
treaty revision; President Arthur's message to Congress of De- 
cember, 1883, declared the readiness of his Government 

to consider the request of Japan to determine its own tariff duties, 
to provide such proper judicial tribunals as may commend them- 
selves to the Western powers for the trial of causes to which for- 
eigners are parties and to assimilate the terms and duration of its 
treaties to those of other civilized states. 19 

Less than three years later, April 30, 1886, on the eve of a treaty 
revision conference, President Cleveland approved a treaty of 
extradition between the two countries "because," as he explained 
a few weeks later, "of the support which ^ts conclusion would 
give to Japan in her efforts towards judicial autonomy and com- 
plete sovereignty." 20 

By the end of 1883, Great Britain began to veer toward sup- 
port of Japan, and steadily continued in this support during the 
next decade. The aid given by the United States Minister be- 
tween 1873 and 1885 in breaking the coercive policy of the 

is James D. Richardson, Messages and Papers of the Presidents, VIII, 175. 
*Ibid., p. 402. 


Powers and in pushing Japan along the road to treaty revision 
and full membership in the family of nations was no longer 
needed, and American influence at Tokyo again waned; the 
Anglo- Japanese treaty of July, 1894, became the master- treaty 
in Japan's rise to equality with the western Powers. 21 The 
United States, which had been the trail-blazer, became the fol- 
lower by signing with Japan a treaty in November, 1894, similar 
to that signed in July by England. Provision was made for the 
ending, after five years, of consular jurisdiction in Japan. The 
British treaty provided for the continuance of a conventional 
tariff on some sixty commodities and for the continued participa- 
tion of British ships in the coasting trade of Japan. The Ameri- 
can treaty provided for no tariff concessions, although as long 
as the European Powers demanded them the United States was 
free to profit thereby on the basis of the most-favored-nation 
clause. By 1899, however, the extraterritoriality problem was 
solved and twelve years later that of tariff autonomy. 


The interest of the United States in Korea was aroused in 
1866 by the wrecking of Americans on the Korean coast, the at- 
tempts of American nationals to enter into trade relations with 
Koreans, and the plans of France to punish attacks by Koreans 
on French priests, the execution of nine of whom in March, 1866, 
was followed by an announcement of the French Charge d? Af- 
faires in Peking that his Government intended to annex the 
country. In July the crew of the American schooner, General 
Sherman, which had trade for its object, got into trouble with 
Korean subjects; eigjrt of the crew were killed, the rest were 
made prisoners, and the schooner itself was destroyed. Attempts 
made in 1867 and 1868 to learn exactly what had happened to 
the General Sherman and its crew failed. Plans to send the 
American Consul General at Shanghai to Korea in the summer of 
1868 to negotiate a treaty also failed, but, in 1871 the United 
States Minister at Peking, accompanied by Admiral John 

21 Seiji Hishida, The International Position of Japan as a Or eat Power (New 
York, 1905), pp. 137 ff. 


Rodgers and a squadron of five steamships, reached Kianghwa. 
While awaiting the appointment by the Korean Government of 
officials sufficiently high in rank to meet the United States Min- 
ister, surveys were begun of the coast. As the surveying ships 
were fired upon, the forts on Kianghwa Island were seized and 
destroyed, and more than two hundred and fifty Korean soldiers 
killed. As the court still refused to come to terms the Americans 
sailed away in July, having failed to open the country to foreign 
intercourse by either peaceful or warlike measures. 

After attempting unsuccessfully in 1880 to open negotiations 
with Korea through Japanese channels, American officials made 
the next attempt by way of China. With the aid of Li Hung 
Chang, Commodore Shufeldt negotiated a treaty with Korea in 
1882. Six years earlier Japan had signed a treaty with Korea 
which recognized its full sovereignty, although China claimed it 
as a vassal state and Korea acknowledged the relationship. In- 
asmuch as no dependent-state clause was incorporated in the 
American treaty of 1882, Japan's diplomacy was strengthened 
and a step taken toward the disruption of the long-standing re- 
lation between China and Korea; opening eastern lands to its 
trade, the United States had unwittingly contributed to the 
course of events which led ultimately to the Sino-Japanese and 
Russo-Japanese Wars, and the annexation of Korea by Japan 
in 1910. 

Japanese Expansion. 

Years before the completion of the movement to wreck the 
government of the Tokugawa Shogun and restore the emperor 
to power, Japan entered upon a policy of expansion and con- 
solidation which was to affect its relations with the United States, 
and the position of the United States in the area under considera- 
tion. As early as 1861 Japan asserted its claim to that part of the 
Bonin Islands seized by order of Commodore Perry in 1853; to 
this the United States Government registered no objection. In 
1871 the claims of the province of Satsuma to the Liuchiu Islands 
were taken over by the recently established imperial government 
of Japan, and in the following year this archipelago was incor- 


porated into the empire. For hundreds of years these islands had 
been paying tribute jointly to China and Japan, and the former 
was not a little unwilling to recognize the new state of affairs. The 
matter was complicated in 1874 by the decision of Japan to pun- 
ish certain of the tribes of Formosa for having eaten some ship- 
wrecked Liuchiuans cast upon the island in December, 1871, 
China having refused to accept responsibility for the savages' 
appetites. Japan, following the custom of international law, con- 
tended that China thereby forfeited the right of exercising sov- 
ereignty over Formosa. Prince Kung's reply to the Japanese 
Ministers, May 14, 1874, was characteristic of the Chinese at- 
titude : 

Formosa is an island lying far off amidst the sea and we have 
never restrained the savages living there by any legislation, nor 
have we established any government over them, following in this a 
maxim mentioned in the Rei Ri: "Do not change the usages of a 
people, but allow them to keep their good ones." But the territories 
inhabited by these savages are truly within the jurisdiction of 
China. 22 

The Japanese were encouraged and advised by Le Gendre, 
United States Consul at Amoy, to consider a permanent hold 
over the eastern part of Formosa, Le Gendre himself and two of 
his countrymen, with an American steamer, taking service with 
Japan. When it became clear that China disapproved of Japan's 
punitive expedition, the United States Government forbade its 
nationals to participate. The quarrel over the Liuchiu Islands 
dragged on until 1881 when China formally recognized Japanese 
suzerainty over the group. The Formosan question was settled in 
1895 in favor of Japan by the Treaty of Shimonoseki. 

Korean Independence. 

Having recognized Korean independence, the Washington 
government in the following year established a legation in Seoul, 
and advocating equal treatment for all aliens, took the stand that 

22 China Despatches, XXXVI, No. 55, August 22, 1874, Williams to Fish; 
quoted by Tyler Dennett, The American Journal of International Law, XVI, 
No. 1, January, 1922, p. 10. 


the enjoyment by the Chinese of certain exclusive privileges in 
Korea could not be tolerated. Meanwhile relations between the 
Korean court and the American diplomatic representatives were 
cordial; American missionary work was opening; a Korean 
embassy to the United States in 1883 had been entertained and 
had returned to Seoul with favorable reports; and the king re- 
quested that American school-teachers and military instructors 
be sent to aid in modernizing the country. The request for the 
latter type of instructor had been approved by both China and 
Japan, but years passed before the component parts of the 
United States Government could bring themselves to act, and the 
arrival of three army officers in 1888 was too late for effect. 
Despite Chinese opposition, which drew a rebuke from Secretary 
of State Bayard, a Korean mission reached Washington in 1888 
and an independent legation was established there. A few months 
later, nevertheless, Chinese influence was strong enough to obtain 
the recall of Ensign George C. Foulk, the American Charge at 
Seoul, on the charge that he had been encouraging King Yi 
Hyeung in independence of action. 23 

During these years the United States displayed little interest 
in Far Eastern affairs as distinct from the Asiatic immigration 
question. When Korean inability to play the role of a sovereign 
nation became evident and the conflict of Chinese and Japanese 
policies with reference to Korea led to war in 1894, the United 
States Government limited itself to a tender of good offices. These 
were declined, and after war had broken out Secretary of State 
Gresham refused to join the European Powers in intervention, 
declared that American policy was not endangered, and stated 
that the attitude of the United States toward the belligerents was 
"that of an impartial and friendly neutral desiring the welfare 
of both. 5 ' 24 Neutrality, without shadow of intervention, was the 
policy which the United States Government continued to pursue 
to the end. During this same period anti-missionary outbreaks 
took place in China against which the United States Government 
felt obliged to protest. In Japan, on the other hand, there was 
no such problem, the Japanese Government having come to the 

23 Dennett, Americans in Eastern Asia, p. 484. 24 Quoted in ibid., p. 499. 


conclusion that anti-Christian movements were not in keeping 
with its aim to obtain a revision of the treaties and a place in the 
family of nations. 

When, in 1895, the United States Minister to Korea failed to 
keep to the path of rigid neutrality, he was rebuked by Secretary 
Gresham. From the time of the signing of the Shufeldt Treaty in 
1882 the Korean authorities, ignorant of the international law 
and customs of the West, interpreted the offer of good offices as 
more than a promise to mediate when the parties to a dispute ap- 
prove, and tended to think of the United States as practically the 
ally and protector of Korea ; but Secretary of State Sherman in- 
structed the newly appointed Minister to Korea that there was 

reason to believe that rival purposes and interests in the east may 
find in Korea a convenient ground of contention, and it behooves 
the United States and their representatives, as absolutely neutral 
parties, to say or do nothing that can in any way be construed as 
taking sides with or against any of the interested powers. And such 
particularly would not only be in itself improper but might have 
the undesirable and unfortunate effect of leading the Koreans them- 
selves to regard the United States as their natural and only ally for 
any and all such purposes of domestic policy as Korea's rulers may 
adopt. 25 

Open Door Policy. 

Between 1898 and 1900 the number and size of foreign settle- 
ments and concessions in China were considerably increased by 
the activities of the Russians, Germans, English, Japanese, Bel- 
gians, and French, American nationals playing a part in the ex- 
pansion of the International Settlement of Shanghai. One can 
understand the lament of Chinese statesmen "that the whole world 
is China's enemy. 9526 

In March, 1898, China leased to Germany, provisionally for 
ninety-nine years, the land at the entrance to Kiaochau Bay. In 
the same month and in the following May, China leased Port 
Arthur and Dalny with their adjacent waters and islands to 
Russia for twenty-five years with the possibility of extension. 

25 Korea Instr., I, November 19, 1897. Quoted by Dennett, op. cit., p. 506. 
20 Paul H. Clyde, International Rivalries in Manchuria, 1689-1922, p. 229. 


In April the French raised their flag over Kwangchow Wan 
which was to serve as a naval station ; China ratified the conven- 
tion for this lease on January 5, 1900. 27 England was heartily 
opposed to the partition of China; its interest, like that of the 
United States, lay in an intact country open to the trade of all 
nations. Nevertheless it felt the need for a balance to Russia in 
the Liaotung Peninsula, and, on July 1, signed a convention by 
which it leased a strip of land ten miles wide around the Bay of 
Weihaiwei and the island within the bay "for so long a period as 
Port Arthur shall remain in the occupation of Russia," and as 
an offset to the French lease of Kwangchow Wan negotiated a 
convention by which its hold on Kowloon Peninsula opposite 
Hong-kong was greatly extended. In 1899 Italy made an unsuc- 
cessful attempt to obtain a naval base on Sanmen Bay in 
Chekiang Province. In addition, during the years 189798 China 
was required by France, England, and Japan to issue declara- 
tions of nonalienation of territory which strengthened their posi- 

The scramble for concessions in China which bade fair to end 
in its partition could scarcely fail to arouse the Washington 
government to action. During the generation which had passed 
since Anson Burlingame's ministry in Peking the policy of co- 
operation fostered by him had died of inanition. At the close of 
the century the United States had to decide between playing a 
lone hand in China, with the probability of being pushed out of 
the game, or making at least a feint toward cooperation. The 
latter was chosen, and Secretary Hay's friend and adviser, 
W. W. Rockhill, was mainly responsible for the Denunciation of 
American policy. On August 28, 1899, Rockhill incorporated 
specific recommendations in a memorandum to Hay which the 
Secretary embodied in his circular note to the Powers on Sep- 
tember 6. 28 

27 Cheng Sih-gung, in Modern China, pp. 158-159, makes it appear that the 
Russian, French, and German demands on Japan for the retrocession of the Liao- 
tung Peninsula were instigated by Li Hung Chang. 

28 For the note and a discussion of it, see Survey, 1928, p. 80; for the replies 
of the powers, see W. W. Willoughby, Foreign Rights and Interests in China, I, 
70 ff. 


The so-called Hay policy of the open door was not new ; it was 
a restatement with specific application of the most-favored- 
nation policy which had motivated both American residents in 
China and their home government from the beginning. Nor was 
it primarily Secretary Hay's policy; President McKinley had 
used the term "open door" a year before the dispatch of the 
notes by the Secretary of State. Nor was it peculiarly Ameri- 
can ; Lord Palmerston, in his instructions to the two Elliots dated 
February 20, 1840, cautioned them to 

bear in mind that Her Majesty's Government do not desire to ob- 
tain for British Subjects any exclusive privileges of Trade, which 
should not be equally extended to the Subjects of every other 
Power. 29 

Lord Charles Beresford, a representative of the Associated 
Chambers of Commerce of Great Britain, on tour through China 
and Japan, used the term in 1898 in a speech in Shanghai and 
declared it to be the policy of the English cabinet. Later in 
Japan he advocated a "commercial alliance or understanding 
based on the principle of the open door" ; moreover, he proposed 
an alliance of Great Britain, Japan, the United States, and Ger- 
many "with the definite understanding on the integrity of China, 
so that the door can be kept open." 30 During Hay's ambassador- 
ship in London, Lord Salisbury, Premier and Foreign Secretary, 
had suggested the desirability of an Anglo-GermanAmerican 
alliance having for one of its objects the maintenance of the in- 
tegrity of China. While personally approving the idea, the 
American Ambassador realized that it was impossible, since in 
international relations the United States Government is slow to 
assume the kind of responsibility which an agreement to maintain 
the integrity of China would imply. 

The work of Rockhill and Hay undoubtedly slowed conti- 
nental European action in China; this was beneficial to the 
United States no less than to China, otherwise Washington 
would not have exerted itself as it did. Although the terms 

29 Quoted by H. B. Morse, International Relations of the Chinese Empire, I, 
Appendix B, p. 630. 

so Japan Times, January 22, 1899 ; cited by Dennett, op. cit., note, p. 641. 


"sphere" and "sphere of interest" were placed in quotations, 
their existence was clearly recognized by the United States with- 
out protest, nor was China consulted or asked to participate in 
keeping its doors open. Even after the Boxer outbreak the United 
States Government in 1900 asked Japan's approval of its lease 
of a coaling station on the Fukien coast. Since this province was 
within Japan's "sphere of interest," the United States Govern- 
ment dropped the matter without consulting China when Japan 
disapproved. 81 

The Boxer Rebellion. 

At the time of Hay's notes, zealous patriots known as Boxers 82 
attempted to free China from alien influence. In May, 1900, 
numerous hostile acts were committed by them against for- 
eigners ; on the last day of the month armed guards for the lega- 
tions were taken up from Tientsin. So threatening became the 
situation in Peking that on June 9 the British and American 
ministers telegraphed to the admirals of their respective coun- 
tries off Taku. The British Admiral, Seymour, headed an inter- 
national force of 2,156, including 112 Americans, for the relief 
of the legations ; the force failed to reach Peking and fell back 
on Tientsin. To keep in touch with the Seymour force, with 
Tientsin, and with Peking, the admirals decided they must control 
the Pei-ho River leading to Tientsin. They issued an ultimatum 
calling for the surrender of the Taku forts at the mouth of the 
Pei-ho by the early morning of June 17, and as the Chinese 
opened fire before the ultimatum expired, captured the forts. The 
American Admiral, Kempff, refused to cooperate in this enter- 
prise on the ground that his country and China were not at war, 
and that such an act would unite China against the foreigners and 

si E. T. Williams, China Yesterday and Today, 4th ed., p. 491. 

32 The term "Boxer" is a misnomer. "In the provinces there were in many 
places societies for self-protection against the activities of the robbers who made 
the country-side unsafe. These institutions called themselves I Ho T'uan (Union 
for the Protection of the Public Peace). This title was later changed to I Ho 
Ch'uan (The Fist for the Protection of the Public Peace). This expression was 
subsequently wrongly translated by the word Boxer, although there was no ques- 
tion of boxing in the whole affair." Richard Wilhelm, The Soul of China (1928), 
p. 26. 


endanger many lives in the interior ; he was upheld by President 
McKinley. Partly on account of the seizure of the forts and 
partly for other reasons the foreign envoys and all other for- 
eigners were ordered, on June 19, to leave Peking within twenty- 
four hours; on the twentieth a declaration of war was ordered, 
the German Minister, Baron von Ketteler, was murdered, and 
firing on the legations began. From then until mid- August, when 
the fall of the capital was brought about by the concurrent at- 
tacks of the western armies and of Japan, the foreigners in 
Peking were in a state of siege. 

American Policy Restated. 

On July 2 the French Government proposed that the powers 
should agree upon the maintenance in China of the territorial 
status quo On the following day Secretary Hay dispatched a 
circular telegram to the American representatives in Berlin, 
Paris, London, Rome, St. Petersburg, Vienna, Brussels, Madrid, 
Tokyo, The Hague, and Lisbon in which he defined 

the attitude of the United States as far as present circumstances 
permit this to be done. We adhere to the policy initiated by us in 
1857 of peace with the Chinese nation, of furtherance of lawful com- 
merce, and of protection of lives and property of our citizens. . . . 
If wrong be done to our citizens we propose to hold the responsible 
authors to the uttermost accountability. 34 We regard the condition 
at Peking as one of virtual anarchy, whereby power and responsi- 
bility are practically devolved upon the local provincial authorities. 
So long as they . . . protect foreign life and property, we regard 
them as representing the Chinese people, with whom we seek to re- 
main in peace and friendship. The purpose of the President is, as it 
has been heretofore, to act concurrently with the other powers ; 
first, in opening up communication with Peking and rescuing the 

33 Williams, op. cit., p. 501. 

34 Compare Secretary Hay's statement with that of Lord Palmerston of Janu- 
ary 9, 1847: 

"The Chinese must learn and be convinced that if they attack our people and 
our factories, they will be shot; and that if they ill-treat innocent Englishmen 
. . . they will be punished. . . . Depend upon it, that the best way of keeping 
any men quiet is to let them see that you are able and determined to repel force 
by force; and the Chinese are not in the least different, in this respect, from the 
rest of mankind." 


American officials, missionaries, and other Americans who are in 
danger; secondly, in affording all possible protection everywhere in 
China to American life and property ; thirdly, in guarding and pro- 
tecting all legitimate American interests ; and fourthly, in aiding to 
prevent a spread of the disorders to the other provinces of the Em- 
pire and a recurrence of such disasters. It is of course too early to 
forecast the means of attaining this last result; but the policy of 
the Government of the United States is to seek a solution which 
may bring about permanent safety and peace to China, preserve 
Chinese territorial and administrative entity, protect all rights 
guaranteed to friendly powers by treaty and international law, and 
safeguard for the world the principle of equal and impartial trade 
with all parts of the Chinese Empire. 85 

Secretary Hay's note summarizes United States policy with 
reference to China in 1930 as completely as it did thirty years 
ago. A fuller interpretation, if not additional meaning, is given 
to the open door policy by the reference to "Chinese territorial 
and administrative entity" and to "the principle of equal and 
impartial trade with all parts of the Chinese Empire." The dis- 
tinction between a people and its rulers has appeared more than 
once in American diplomacy. The use of the word "concurrently" 
instead of, for example, "cooperatively" is also noteworthy. 

Foreign 'Encroachment. 

In spite of their expressions of approval of this policy several 
of the Powers seized the opportunity for aggressive action pre- 
sented during the following months. Most conspicuous were the 
Russians in South Manchuria, and at Tientsin where they seized 
a concession of one thousand acres. This was followed by de- 
mands by Belgium, France, Italy, Japan, and Austria for new 
concessions or enlargement of old ones; the next year similar 
demands were made by British and Germans. Since 1861 the 
United States had claimed a concession at Tientsin over which 
it had never assumed control; lest they be shut out from trade 
there the Americans now considered assuming control of the 
area earlier allotted to them, but finally decided that it should be 

so Appendix, For. ReL, 1901, "Affairs in China," p. 12. 


added to the British concession subject to the right of recall at 
any time. As if to show the strength of spirit which so often 
accompanies weakness of the flesh, England and Germany signed 
a voluntary limitation agreement 36 on October 16, 1900, which 
England thought was directed against Russian aggressions but 
which was later found to have for its main object the restriction of 
the English "sphere of influence" to and in the Yangtze Valley. 
The possibility of a repetition in China of the sort of delimitation 
of spheres of influence which Russia and Great Britain had 
agreed to in Persia was not remote. The Anglo-German agree- 
ment reiterated the principle of the open door, and declared that 
the contracting parties would 

not make use of the present complication to obtain for themselves 
any territorial advantages in Chinese dominions and will direct their 
policy toward maintaining undiminished the territorial conditions 
of the Chinese Empire. 

At this early period the possibilities of twisting the meaning of 
the principles of equal economic opportunity and of China's terri- 
torial and administrative integrity, and diplomatically prevent- 
ing their application became evident. 

Russia and Japan in Korea. 

Among the factors which serve to explain Japan's acceptance 
of American annexation of the Hawaiian and Philippine Islands 
in 1898, not the least significant was its desire for American 
friendship and support in its aims and actions in Korea follow- 
ing the Sino-Japanese War. From the period of the signing of 
the Shufeldt Treaty in 1882 to the annexation by Japan in 1910, 
Korea was a shuttlecock of the Powers. Russia as well as Japan 
desired the approval of the United States, and the investment of 
American capital, but American capital was shy, and a contract 
for a railroad, which the Americans obtained with Russian aid, 
was carried out in cooperation with the Japanese. The latter sug- 
gested that American capital should be introduced into Korea 
under their guidance a type of suggestion which, mutatis 

ae British and Foreign State Papers, 1900-1901, XCIV, 897-898. 


tandis, has in recent decades found favor in the Far East as a 

The aggressive actions of Russia in China, particularly in 
Manchuria, and in Korea contributed largely to the signing on 
January 30, 1902, of the Anglo- Japanese Alliance. In this the 
open door policy, and American Far Eastern policy in general, 
seemed to gain additional strength. The preamble explicitly 
stated the special interest of the contracting parties in 

maintaining the independence and territorial integrity of the Em- 
pire of China and the Empire of Corea, and in securing equal op- 
portunities in those countries for the commerce and industry of all 
nations. . . , 87 

The purity of motive evinced was slightly adulterated by the 
reference in the first article to the "special interests" of both 
countries in China and the "peculiar degree" to which Japan was 
interested in Korea. The new alliance, as such alliances do, pro- 
duced two immediate counter moves: the application to the Far 
East of the previously existent Dual Alliance of Russia and 
France, and the signing of a Russo-Chinese convention on April 
8, 1902. By the latter, Russia recognized Chinese sovereignty over 
Manchuria, and agreed to withdraw its military forces within cer- 
tain time limits ; this it failed to do. 


Prior to the Russo-Japanese War, the United States was in- 
terested in Manchuria more than in Korea. In 19011902 con- 
siderable friction developed between the Americans and the Rus- 
sians in the Manchurian open port of Newchwang which was 
controlled by the latter. To prevent Russia from gaining for 
itself a permanent position of exclusive privilege in Manchuria, 
the United States in 1903 asked China to open three new ports, 
Tatungkow, Mukden, and Harbin, to foreign trade. To block 
this Russia forced a new convention upon China in April, 1903, 
as precedent to any other move toward withdrawal from Man- 
churia. Among the "seven points" were the requirements that 
China must refuse to open new treaty ports in Manchuria, 

37 British and Foreign State Papers, 1901-1902, XCV, 83-84. 


to allow foreign consuls to be stationed there, and to employ 
any foreigners save Russians in the North China service. The 
United States Government immediately protested to Peking 
against these demands, and reserved for later consideration the 
others made by Russia. Meanwhile Russia vigorously denied the 
existence of the "Convention of seven points," as Japan denied 
the existence of the Twenty-one Demands twelve years later. 
Into the exceptionally tortuous and obscure diplomacy regarding 
this matter there is no need to enter. Suffice it to say that one 
result was the throwing of the sympathy, and moral or more than 
moral support of President Roosevelt to the side of Japan when 
war broke out with Russia in 1904. Finally on July 11, 1903, 
Russia officially withdrew its opposition to the opening of new 
Manchurian ports (with the exception of Harbin) and the Chi- 
nese Government agreed to a treaty with the United States in 
which the opening of new ports in Manchuria would be provided 

Notwithstanding the desire to "preserve Chinese territorial 
and administrative entity," expressed in Hay's note of July 3, 
1900, the prime object of the State Department was to safeguard 
American interests rather than the territorial integrity of China. 
Writing to President Roosevelt on May 1, 1902, Hay remarked: 

We are not in any attitude of hostility toward Russia in Man- 
churia. On the contrary, we recognize her exceptional position in 
northern China. What we have been working for two years to ac- 
complish, if assurances are to count for anything, is that, no matter 
what happens eventually in northern China and Manchuria, the 
United States shall not be placed in any worse position than while 
the country was under the unquestioned dominion of China. 38 

Japan, on the contrary, felt that its future was at stake. Met by 
Russian evasion, deceit, procrastination, even insolence on every 
occasion of attempting a solution of the difficulties with Russia in 
Korea and Manchuria, Japan struck on February 8, 1904, and 
declared war afterward, as it had done in the case of China ten 
years earlier. 

ss Tyler Dennett, Roosevelt and the Russo-Japanese War, pp. 135-136. 


United States-Japanese Agreement. 

In the war the United States, while officially neutral, was in 
reality, through President Roosevelt's work, a spiritual ally of 
Japan. 39 "The Russo-Japanese conflict was essentially a war, not 
for the integrity or independence of either Korea or China but 
for the control of both." 40 As early at least as January, 1905, 
President Roosevelt came to the conclusion, which he informally 
stated to Secretary Hay, that the Korean people were incapable 
of defending their independence and also that it was impossible 
for the United States to interfere in the course of events in that 
country. To this conclusion the governments of Europe had 
come, or were coming, as intimated in the renewed Anglo-Japa- 
nese Alliance of August, 1905. While favoring Japan, President 
Roosevelt recognized that it might cause trouble to American 
possessions in the Pacific and the Far East, and he feared that 
it might swing away from Anglo-American cooperation to an 
alliance with Russia. Welcome, therefore, was an assurance from 
Japan that it would not interfere with the Philippine Islands. On 
July 29, 1905, without the knowledge of the American Am- 
bassador to Tokyo, Premier Count Katsura held a diplomatic 
conversation with the Secretary of War, Mr. Taft, who acted as 
the President's personal representative. The consequent "agreed 
memorandum" received the President's approval two days later. 
The last sentence of the first paragraph reads : 

Count Katsura confirmed in the strongest terms the correctness of 
his [Mr. Taft's] views on the point and positively stated that Japan 
does not harbour any aggressive designs whatever on the Philip- 
pines. . . . 

The Premier then suggested the desirability of a 

good understanding or an alliance in practice, if not in name . . . 
between these three nations [Great Britain, Japan, and the United 
States] in so far as respects the affairs in the Far East. 

To this Mr. Taft replied that the consent of the Senate was 
necessary for even a "confidential informal agreement," but that 

89 See Survey, 1928, p. 33. *o Dennett, op. cit. f p. 143. 


he felt sure that without any agreement at all the people of the 
United States was so fully in accord with the policy of Japan and 
Great Britain in the maintenance of peace in the Far East that 
whatever occasion arose appropriate action of the Government of 
the United States, in conjunction with Japan and Great Britain, 
for such a purpose could be counted on by them quite as confidently 
as if the United States were under treaty obligations to take [it]. 

The Premier then intimated his country's plan to assume control 
of Korean foreign affairs so that Japan might not be forced to 
enter "upon another foreign war." To which Mr. Taft, while 
disclaiming any "authority to give assurance," stated his ap- 
proval of Japanese plans and his belief that President Roose- 
velt "would concur in his views in this regard. ..." Mr. Tyler 
Dennett, who in 1924 made known to the world the existence of 
this agreement, comments : 

President Roosevelt believed that when Russia was defeated in 
the Far East Japan conferred a benefit upon American interests. 
The distinctive feature of Roosevelt's Far Eastern policy was that 
he did not ignore the implied obligation. He was prepared, in return, 
to help Japan he was prepared to have the United States make 
some payment for the advantages which Americans enjoyed in East- 
ern Asia. It has been rare to find American statesmen who would 
follow President Roosevelt in this very honorable principle. Perhaps 
the most conspicuous characteristic of American policy in the Far 
East, viewed in the large, has been the desire to get something for 
nothing. Possibly in assenting to the agreed memorandum he dis- 
played a willingness to pay too much. He really assented to some- 
thing like a blank check, for he did not have the foresight to require 
a bill of particulars as to the measures which would be taken under 
the second Anglo-Japanese Alliance to maintain the peace of the 
Far East measures which turned out to be inimical to American in- 
terests. However, the fact that the diplomacy was bungled does not 
affect the fact that the principle of statesmanship was sound. 41 

Treaty of Portsmouth. 

The willingness of Russia and Japan to make peace led the 
President on April 20, 1905, to suggest the desirability of direct 

4i Current History, XXI, 21. 


negotiations between the warring nations; at the same time he 
expressed his expectation that Japan would abide by the doc- 
trine of the open door in Manchuria and return that area to 
China. To this Baron Komura, Japanese Foreign Minister, 
assented five days later. On May 31 Japan formally requested 
that President Roosevelt should "directly and of his own motion 
and initiative . . . invite the two belligerents to come together 
for the purpose of direct negotiations." As Japan was ready to 
support the President's peace efforts, and Russia was agreeable, 
identic notes were sent from Washington on June 8 in which the 
two Powers were urged to appoint plenipotentiaries for the con- 
sideration of peace terms. Both Governments agreed. 

The resulting Conference at Portsmouth, New Hampshire, 
lasted from August 10 to September 5. Over the demands of the 
Japanese for indemnity and territorial compensation the Con- 
ference all but broke up in the period August 16-29. But Roose- 
velt was able to present such cogent reasons to the Czar, to the 
Kaiser, and to the Japanese plenipotentiaries that on August 29 
an agreement was reached. The Japanese dropped their claim for 
indemnity and offered to restore the northern part of Saghalin 
to Russia; nevertheless, failure to maintain its pose of altruism 
throughout the negotiations and the disclosure of its ambitions in 
these demands, in addition to the developments in Korea and 
Manchuria during the next half decade, served to turn from 
Japan a considerable part of the sympathy and admiration which 
had been patent in the American attitude during the preceding 
generation. As foreshadowed in the discussion on July 29 between 
Premier Katsura and Mr. Taft, and by other developments as 
well, Japanese "paramount political, military, and economic in- 
terests" in Korea were recognized by Russia in the treaty. Both 
nations agreed to evacuate Manchuria which was to be adminis- 
tered exclusively by China ; the Liaotung Peninsula, which was to 
be leased to Japan, was excepted. Chinese sovereignty and the 
open door were recognized. The railway from Port Arthur to 
Changchun was ceded to Japan ; that north of Changchun was to 
continue under Russian control. 

With the conclusion of the Komura Treaty on December 22, 


1905, by which China accepted the provisions of the Portsmouth 
Treaty, Japan obtained freedom of action in Manchuria. It pro- 
ceeded to attach to the open door in that area an automatic spring 
which would quietly and speedily close the door. In Korea on No- 
vember 17, Japan had succeeded in negotiating a convention by 
which it took over full control of Korea's foreign relations and in- 
stalled a Japanese resident-general who had oversight of Japa- 
nese resident officials, and by an English loan it was able to obtain 
control of the South Manchuria Railway, blocking the Straight- 
Harriman plan for American participation. 

Japan was moreover able to forestall Chinese efforts to bring 
about an understanding with the United States. On May 25, 

Mr. Root informed [informs] Mr. Rockhill of the passage of the 
bill authorizing the President to modify the indemnity bond [Boxer] 
from $24,400,000 to $13,655,492.69 and interest at 4 per cent, 
and to remit the remainder of the indemnity as an act of friend- 
ship . . . 42 

The proceeds were to be devoted to educational purposes in China 
and the sending of Chinese students to America. Early in Au- 
gust, Tang Shao-yi, Governor of Fengtien, was sent to Wash- 
ington to thank the United States Government. His visit had 
also the purposes of seeking to bring about a new understanding 
between China, Germany, and the United States, and of floating 
a $20,000,000 loan to establish a bank in Manchuria which 
should finance Manchurian mining, timber, agricultural, and 
railway developments. The latter project was the result of con- 
ferences between Governor Hsu Shih-ch'ang of Manchuria, Gov- 
ernor Tang, and Willard D. Straight, United States Consul Gen- 
eral at Mukden, but it came into conflict with larger interests 
which must be briefly referred to. 

United States Influence in the Pacific. 

Contemporaneously with the manifestations of its interest and 
growing power in Pacific and Far Eastern areas between 1898 
and 1905, the United States was making additionally clear its 

42 For. ReL, 1908, p. 64. 


position with reference to connecting the Pacific and Atlantic 
oceans by a canal. 48 With the completion of the Panama Canal 
United States naval strategy was revolutionized, being based on 
two fleets, one on the east coast, one on the west. With control of 
the Panama Canal and ownership of Hawaii there could be no 
doubt of American domination of the eastern Pacific, while the 
shortened and quickened means of communication between the 
two coasts of the United States made its position in the western 
and southern Pacific and the Far East much more important 
than hitherto. 44 After the opening of the Canal its position in the 
Pacific was potentially strengthened by the Bryan-Chamorro 
Treaty of 1916 relating to a canal route across Nicaragua. 45 

Relations with Japan. 

Meanwhile, upon more than one occasion, relations between 
the United States and Japan had become strained. American 
bankers had aided Japan to finance its struggle with Russia, and 
the United States Government had looked with something more 
than complacency upon the defeat of Russia and observed without 
loss of equanimity the unfolding of Japan's policy in Korea. Yet 
on July 30, 1907, less than two years after the signing of the 
Portsmouth Treaty, Russia and Japan signed an open conven- 
tion and a secret agreement: in the former the open door prin- 
ciple was again recognized; in the latter the two Powers agreed 
upon the line of division between their respective spheres of in- 
fluence in Manchuria. It soon became evident that President 
Roosevelt's fear of cooperation between Japan and Russia for 
exploitation of the Chinese Empire was well founded. The two 
agreements were but links in a chain of treaties and alliances 
affecting eastern Asia which grew out of the Anglo-Japanese 
Alliance and the War of 1904-1905. 46 The first of these was the 
Japanese- American "agreed memorandum" of July 29, 1905. On 

43 The negotiations for a route and the construction of the Canal were de- 
scribed in the Survey, 1929, pp. 200 ff. 

44 For other advantages, see ibid., 1929, pp. 281 ff. 
45/6iV/ v 1929. 

4fl The Entente Cordiale between Great Britain and France had just preceded 
that war. 


June 10, 1907, France and Japan signed an agreement at Paris : 
while agreeing to respect the independence and integrity of 
China, the signatories announced nevertheless their special in- 
terests in the maintenance of peace and order in the "regions of 
the Chinese Empire" bordering their own possessions ; each was 
to support the other in maintaining security in those parts and 
their "territorial rights" on "the continent of Asia." Next in 
point of chronology came the Russo-Japanese agreements of 
July 30, 1907, to be followed on August 31 by the Anglo-Rus- 
sian convention. The latter relieved the old tension between the 
British and Russian empires which had been largely responsible 
for the consummation of the Anglo- Japanese Alliance. The gen- 
eral effect of these agreements was the exclusion of Germany 
from participation in the domination of China which Japan, 
England, France, and Russia were to enjoy in defiance of the 
open door doctrine. 47 

The German Emperor and the Chinese Government viewed 
with misgiving the diplomatic trend in the Far East. Ignorant 
of the Japanese- American "agreed memorandum" of 1905, but 
aware of the increasing friction between the Americans and 
Japanese over the immigration of the latter into Hawaii and the 
Pacific Coast states, both Germany and China considered the 
possibility of a German-Chinese-American agreement or alliance 
which should serve as an offset to those of Great Britain, Russia, 
France, and Japan, and prevent the threatened partition of 

Root-Talcdhira Notes. 

When Governor Tang reached Washington on November 30, 
on the mission described above, he was shown the notes which 
Baron Takahira, Japanese Ambassador to the United States, had 
hastily exchanged with Secretary Root, and which were signed 
four hours later. "The independence and integrity of China and 
the principle of equal opportunity" therein were sought and the 
two Powers announced their wish "to encourage the free and 

47 Cf. H. B. Morse and H. F. MacNair, Far Eastern International Relations, 
II, 760-768. 


peaceful development of their commerce on the Pacific Ocean." 
Without defining the term status quo they expressed their plan to 
maintain it "in the region above mentioned," i.e., the Pacific 
Ocean. Should either the status quo or the "principle of equal op- 
portunity" be threatened the two Governments would decide upon 
the necessary measures. The notes, together with the deaths of the 
empress dowager, Tzu Hsi, and the emperor, Kwang Hsu, in the 
same month, rendered the Tang mission futile, caused the plan for 
a German-American-Chinese agreement 48 to collapse, strength- 
ened Japan's position in Manchuria in consequence, and generally 
weakened American influence in the Far East. Evidence of this 
was not long delayed: in 1906 Russian officials of the Chinese 
Eastern Railway had intimated to American capitalists the possi- 
bility of the sale of that line; toward the end of 1908 inquiry was 
made as to the willingness of Japan to sell the South Manchuria 
Railway in the event of Russia's sale of the Chinese Eastern. To 
this Japan in January, 1909, returned a decided negative. 

Investment of Foreign Capital. 

The "agreed memorandum" of 1905 was a personal under- 
standing between Japan and Mr. Roosevelt as occupant of the 
presidency. Although Mr. Taft had negotiated and signed the 
memorandum, yet when he became President he allowed his Sec- 
retary of State to take a strictly legal point of view quite out of 
line with the policy of the memorandum, and to revert to an 
earlier and less realistic type of diplomacy than that of Roose- 
velt and Hay. Conditions in the Far East shortly attracted the 
attention of the Chief Executive and of the State Department. 
The first occasion had to do with the Hukuang loan and the for- 
mation of the Four Power Group. As far back as 1898 and 1900 
an American syndicate had received a concession for the con- 
struction of a railroad which should link Hankow and Canton, 
the rights conferred by China not to be transferable to non- 
Americans. Nevertheless a majority of the stock of the company 
was purchased in the open market by Belgians who assumed con- 

48 L. J. Hall, "The Abortive German-American-Chinese Entente of 1907- 
1908," Journal of Modern History, I, No. 2, 219-235. 


trol. China then annulled the concession ; the United States Gov- 
ernment refused approval, whereupon, after long correspond- 
ence, an American banking firm purchased the Belgian shares. 
Finally in 1905, at a loss of several millions, the Chinese 
Government bought all the American interests. An attempt on 
the part of the Chinese in the provinces of Hupeh, Hunan, and 
Kwangtung to construct the road themselves failed. The Im- 
perial Government then turned to an Anglo-Franco-German 
syndicate for funds. To this syndicate an American group de- 
manded admission, basing their claims upon promises made by 
Chinese officials in 1903 and 1904 to Minister Conger. The Eu- 
ropean bankers opposed the Americans 5 participation on equal 
terms, and the Peking government gave no evidence of its inten- 
tion to support the claims of the American group. On the ground 
that the proposed loan which 

was to carry an imperial guaranty and be secured on the internal 
revenues made it of the greatest importance that the United States 
should participate therein in order that his Government should be 
in a position as an interested party to exercise an influence equal 
to that of any of the other three Powers in any question arising 
through the pledging of China's national resources, and to enable 
the United States, moreover, at the proper time again to support 
China in urgent and desirable fiscal administration reforms. . . , 49 

President Taft on July 15, 1909, took the unusual step of 
cabling personally to the Prince Regent in Peking urging the 
participation of the Americans in the railway loan. 50 The Im- 
perial Government now acquiesced, as did the European syndi- 
cate; in May, 1910, it was agreed at Paris that the construction 
of the Hukuang railways, including the northern section of the 
Hankow-Canton and the Hankow- Szechwan lines, should be 
equally divided among the members of the Four Power Group. 

The second and third attempts of the Taft administration to 
influence affairs in the Far East, namely in Manchuria, were 
less successful than the first. The assertion by Russia of the right 

49 Statement by Secretary Knox to the press, January 6, 1910, quoted by 
Willoughby, op. cit. f II, 1073. 
BO For. Rel. f 1909, p. 178. 


to assume what was in reality political jurisdiction over Chinese 
nationals and those of the treaty Powers residing in the Chinese 
Eastern Railway zone and the cities and towns along that line 
(particularly in the city of Harbin), had brought from Secre- 
tary Hay an unavailing protest. Secretary Knox determined 
upon another protest to Russia simultaneously with the submis- 
sion to the consideration of the British foreign office of a plan 

to bring the Manchurian highways and the railroad under an eco- 
nomic and scientific and impartial administration by some plan 
vesting in China the ownership of the railroads through funds fur- 
nished for that purpose by the interested powers willing to par- 
ticipate. 51 

The two documents were dispatched on November 6, 1909: that 
to Russia was as fruitless, except as an irritant, as the Hay pro- 
test; that to England had more public but no more successful 
results. When approached later China and Germany briefly ap- 
proved the plan but Russia, Japan, and France turned it down. 

The proposed Chinchow-Aigun line was also blocked by Rus- 
sia and Japan during the early months of 1910. This was fol- 
lowed on July 3 by the second step in the drawing together of 
the two former enemies who now signed a convention in which it 
was agreed that in case of a threat to the status quo in Man- 
churia the two Governments would "enter into communication 
with each other with a view to an understanding as to the meas- 
ures they may think it necessary to take for the maintenance of 
the status quo." The annexation of Korea occurred shortly after- 
ward; thousands of Koreans settled in Manchuria now came 
under Japanese control; in this manner the hold of Japan upon 
South Manchuria was considerably strengthened. 

The failure of Secretary Knox's alternative schemes brought 
into bold relief the changes in the Far East which five years had 
made. More than ever it was clear that the problems of the Far 
East were a part of world politics, as Roosevelt wrote to his suc- 
cessor, President Taf t, on December 22, 1910 : 

Our vital interest is to keep the Japanese out of our country and 
si Willoughby, op. cit., I, 211. 


at the same time to preserve the good will of Japan. The vital in- 
terest of the Japanese, on the other hand, is in Manchuria and 
Korea. It is therefore peculiarly our interest not to take any steps 
as regards Manchuria which will give the Japanese cause to feel, 
with or without reason, that we are hostile to them, or a menace 
in however slight a degree to their interests. . . . I do not believe 
in our taking any position anywhere unless we can make good; and 
as regards Manchuria, if the Japanese choose to follow a course 
of conduct to which we are adverse, we cannot stop it unless we are 
prepared to go to war, and a successful war about Manchuria would 
require a fleet as good as that of England, plus an army as good 
as that of Germany. The Open Door policy in China was an ex- 
cellent thing, and I hope it will be a good thing in the future, so far 
as it can be maintained by general diplomatic agreement; but, as 
has been proved by the whole history of Manchuria, alike under 
Russia and under Japan, the "Open Door" policy, as a matter of 
fact, completely disappears as soon as a powerful nation deter- 
mines to disregard it, and is willing to run the risk of war rather 
than forego its intention. 52 

The tendency toward abstract legal and moral theorizing rather 
than the facing of real and disagreeable facts is to be observed 
in Secretary Knox's reply: 

. . . why the Japanese should think that we ought to accept the 
observance by them of one treaty right due from them to us as an 
offset for the disregard by them of another treaty right due from 
them to us I cannot understand. ... I still believe that the wisest 
and best way for all concerned is for us to stand firmly on our pro- 
nounced policy and let it be known on every proper occasion that 
we expect fair play all round. There are indications that we shall 
in the future receive more support for our policy from Great Britain 
than we recently have had. 58 

The Secretary relied on reports that British nationals in the 
Far East were critical of the policy of their home government 
with reference to Russia and Japan in that area, but he failed to 
comprehend the diplomatic changes of the previous three years. 
Regardless of the approval or disapproval of its nationals in the 
Far East, England, by its renewal of the Anglo-Japanese Al- 

02 Dennett, op. cit., pp. 320-321. 53 Ibid., pp. 321-323. 


liance in 1905 and the signing of the Russian convention of 1907, 
had given evidence of its decision to consider the welfare of the 
empire as a whole rather than that of its nationals in the East. 
England was bound to Japan, and Japan and Russia were now 
allies. Knox's diplomacy forced Russia and Japan to admit offi- 
cially that their declarations and promises to China and the 
United States with reference to the open door were worth noth- 
ing. To China it was made evident that the way of the weak is 
considerably harder than the way of the transgressor. To the 
student of diplomacy it became apparent that in a naughty world 
Roosevelt was able to go farther than Knox. 

Japanese Aggression. 

Among the contributing factors to the revolution which, in its 
military phase, began in China in 1911, were the Hukuang rail- 
way loans mentioned above. The provinces feared that the growth 
of foreign influence in the great Yangtze Valley might have an 
effect similar to that in Manchuria where Chinese sovereignty 
had become a shadow. The Manchu dynasty came to an end with 
the abdication on February 12, 1912, of the baby emperor, 
Hsuan T'ung. Three days later, Yuan Shih-kai became provi- 
sional president of the Chinese Republic which was recognized by 
the Wilson administration in May, 1913, and entered at once 
upon negotiations with the Six Power Group (the members of the 
Four Power Group with Russia and Japan in addition) for a 
loan of from forty to sixty million pounds ; the group demanded 
that it alone should make loans to China for government purposes 
and that the salt tax should be hypothecated and administered un- 
der foreign direction. 

Although the Taft administration had tried (with indifferent 
success) to keep open the doors of equal opportunity in Man- 
churia and China proper, President Wilson, less than a fortnight 
after taking office in 1913, announced that the United States 
Government would give no support to American members of the 
Six Power Group. 

The conditions of the loan seem to us to touch very nearly the 
administrative independence of China itself [he stated] , and this ad- 


ministration does not feel that it ought, even by implication, to be 
a party to those conditions. The responsibility on its part which 
would be implied in requesting the bankers to undertake the loan 
might conceivably go the length in some unhappy contingency of 
forcible interference in the financial and even the political affairs of 
that great Oriental state just now awakening to a consciousness of 
its power and its obligation to its people. 54 

The withdrawal of the American bankers from the sextuple 
group rendered less arduous the struggles of the Europeans and 
the Japanese for further concessions in China and its outlying 
dependencies ; accordingly, in an attempt to prevent China from 
being overreached, President Wilson reversed his policy in 1918 
and supported the formation of an international consortium for 
the making of loans to China. 65 

On the outbreak of the World War, the Washington govern- 
ment communicated with the Powers for the purpose of prevent- 
ing the spread of the struggle to the Far East. On August 3, 
China requested that peace be maintained within its lands and 
waters regardless of the position of the Powers therein. Three 
days later it declared its neutrality by presidential mandate and 
sought the good offices of the United States. The latter proposed 
the maintenance of the status quo in the Far East ; to this Great 
Britain and Germany agreed. Japan, however, on August 13, 
administered a rebuke to China for having requested the good 
offices of the United States instead of those of its near neighbor, 
and two days later Japan, in a note to Germany, "advised" the 
latter to withdraw or disarm immediately all its war vessels in 
Chinese and Japanese waters, and to hand over to Japan the ter- 
ritory of Kiaochau by September 15 "with a view to the eventual 
restoration of the same to China." 56 

The Germans in Tsingtao capitulated on November 7 to a 
German-drilled Japanese army and a small British force. The 
Chinese Government, after correspondence with Japan, notified 
the Japanese and British Ministers at Peking on January 7, 

54 Willoughby, op. cit., IT, 994-995. Also pp. 243-250. 

55 See p. 244 for fuller discussion. 

56 J. V. A. MacMurray, Treaties and Agreements With and Concerning China, 
1894-1919, II, 1167. 


1915, of the abolition of the war zone in Shantung. Japan pro- 
tested and seized the opportunity on January 18 of presenting 
to President Yuan personally the Twenty-one Demands which 
had been in the hands of the Japanese Minister since December 3. 
In the ensuing negotiations secrecy was demanded by the Japa- 
nese Minister ; the Times and the Associated Press were unwilling 
to print the report of them, the American and British publics 
were unaware of them, and Lloyd George later declared that he 
did not know what they were; 57 yet within four days of their 
presentation, the American Minister in Peking made known their 
contents. The Demands can be comprehended only in the light 
of previous developments in Korea and Manchuria; had they 
been accepted in their entirety China would have become a Japa- 
nese protectorate. 58 

The United States alone among the Powers was in a position to 
keep a watchful eye on the Far East during this period of nego- 
tiations. On March 13 the Japanese Ambassador in Washington 
received a memorandum from Secretary Bryan containing a re- 
view of United States policy in the Far East from 1899 onward ; 
he called attention, in the Twenty-one Demands, to Articles III 
and V, paragraphs 1 and 4, and especially to paragraph 6 a 
grant of special privileges in Fukien Province which would "be 
violations of the principle of equal opportunity for the commerce 
and industries of other nations. 55 These proposals, if accepted by 
China, while not infringing the territorial integrity of the Repub- 

57 For reference as to Lloyd George, see Rodney Gilbert, What's Wrong with 
China (1926), pp. 245-246. 

ss In 1887, General Tani, Minister of Commerce and Agriculture who had been 
sent to Europe by the Emperor to study international politics, said in his 
memorial : 

"Then what policy must we pursue? Cease holding the policy and principles 
of the past, laying aside the spirit of dependence, improve our internal govern- 
ment affairs, make our country secure by military preparation, not to bring dis- 
grace upon the name and honor of our country by making an outward show only 
of truth, justice and authority; encourage and protect the people at home and 
then wait for the time of the confusion of Europe, which must come eventually 
sooner or later, and although we have no immediate concern with it ourselves we 
must feel it, for such an event will agitate the nations of the Orient as well, and 
hence, although our country is not mixed up in the matter, so far as Europe is 
concerned, we may then become the chief nation of the Orient" (Dennett, Ameri- 
cana in Eastern Asia, p. 527). 


lie, would be "clearly derogatory to political independence and 
administrative entity of that country. 5 ' Japan acceded to these 
objections, and no others were made. In the continuance of the 
correspondence the Secretary of State made, however, a conces- 
sion which was to be heard of later. 

While on principle and under the treaties of 1844, 1858, 1868, 
and 1903 with China the United States has ground upon which to 
base objections to the Japanese "demands" relative to Shantung, 
South Manchuria, and East Mongolia, nevertheless the United 
States frankly recognizes that territorial contiguity creates special 
relations between Japan and these districts. 59 

The admission as to the effect of "territorial contiguity" was 
the outcome of the use made by Japanese logic of the relations 
between the United States and Mexico. 

When, during the first week of May, relations between China 
and Japan became severely strained, the State Department 
cabled to both governments on May 6 "counselling patience and 
mutual forbearance," and on May 11, three days after China's 
acceptance of the terms of Japan's ultimatum, it sent identic 
notes to the Governments of Japan and China which contained 
assurance that the United States 

cannot recognize any agreement or undertaking which has been 
entered into or which may be entered into between the Governments 
of Japan and China impairing the treaty rights of the United States 
and its citizens in China, the political or territorial integrity of the 
Republic of China, or the international policy relative to China 
commonly known as the open door policy. 60 

The American Minister in Peking also stated that any residential 
rights for the Japanese in Manchuria must, by the most- favored- 
nation clause, accrue to the nationals of all the treaty Powers ; his 
Government confirmed this statement on May 15. That the atti- 
tude of the United States was a cause of irritation to a certain 
section of the Japanese people may be seen by the statement in 

59 For. Rel. f 1915, pp. 105-111. o ibid., p. 146. 


the Chuo Koron of Professor S. Suchiro of the Law College of 
the Imperial University in Kyoto : 

The attitude which the United States takes toward Japan con- 
cerning Chinese problems is ever high-handed, and makes us highly 
discontented. The attitude shown by the United States in the spring 
of last year concerning the Sino-Japanese negotiations and also in 
the affair of Chengchiatun, recently, is as highly offensive as if she 
were the supervisor of Japan's diplomacy vis-a-vis China. Of course 
the Americo- Japan treaty of 1908 empowers the United States to 
champion the maintenance of the principles of equal opportunity, 
but we should be far from pleased to see the United States acting at 
every turn as if she were the only guardian of the Open Door and 
equal opportunity principles in China. This unreserved American 
attitude is calculated to make worse the misunderstanding between 
the two countries. 61 

Bringing China into the War. 

Between February 3, 1917, when the United States broke off 
diplomatic relations with Germany, and April 6, when it declared 
war, a series of secret agreements, written and oral, was nego- 
tiated by Japan with Great Britain, France, Russia, and Italy ; 
the import of these agreements, which were not known to the 
United States even after the latter had declared war on Germany, 
was that in exchange for support at the Peace Conference of 
Japan's claims to the former German possessions in Shantung 
and the German islands in the Pacific north of the Equator, 
Japan would aid in bringing China into the war on the side of 
the Allies, would give additional naval aid in the Mediterranean, 
and vis-a-vis Great Britain would support the latter's claims to 
the German islands in the Pacific south of the Equator. 

On breaking diplomatic relations with Germany the United 
States Government, consonant with its invitation to all neutral 
Powers to break relations with that country, instructed its Min- 
ister in Peking, Mr. Paul Reinsch, to invite China to do like- 
wise. 62 Upon being asked by President Li Yuan-hung and Pre- 
mier Tuan Chi-jui whether the United States were ready to help 

ei Quoted in F. Coleman, The Far East Unveiled, p. 288. 
62 P. S. Reinsch, An American Diplomat in China, p. 249. 


China meet the responsibilities of taking the action advised, 
Reinsch stated his personal opinion that the United States Gov- 

would be found just and liberal in effecting this or other such ar- 
rangements to enable the Chinese Government to meet the respon- 
sibilities which it might assume upon the suggestion of the Presi- 
dent [i.e., Wilson], I should not be wholly frank with you, however, 
if I were to fail to point out that the exact nature of any assistance 
to be given or any measure to be taken must be determined through 
consultation of various administrative organs, in some cases includ- 
ing reference to Congress, in order to make effective such arrange- 
ments as might have been agreed to in principle between the execu- 
tive authorities of the two countries ; and I, therefore could not in 
good faith make in behalf of my government any definite commit- 
ments upon your suggestions at the present time. 

Many Chinese were reluctant to declare war on Germany ; they 
respected the Germans and Austrians, and thought that their 
power and international influence would be helpful to China in 
resisting the encroachments of Japan. Yet in the event of Allied 
victory Japan, if China were not at the peace table, might gain 
a firmer hold in Manchuria and Shantung and rivet the conces- 
sions made at the time of the Twenty-one Demands. This fact, 
together with the urgency of Reinsch and more particularly of 
a foreign clique in Peking, determined the hesitant Chinese upon 
a breach with Germany. 

Diplomatic relations between China and Germany were broken 
off on March 14. During the following five months the question 
of declaring war became involved in domestic politics; in this 
period the president dismissed the premier and dissolved parlia- 
ment, the Manchu emperor was restored to the throne for two 
weeks, the president himself withdrew from office and the capital, 
the vice-president became president and parliament set up a new 
government in Canton. All this was distressing to Washington. 
On June 6 a note was sent to Peking ; hope for the restoration of 
quiet in China was expressed as well as the opinion that China's 
attitude toward Germany was less important than its own safety. 
This Denunciation of a century-old policy of encouragement to 


a Far Eastern state in the maintenance of independence and 
integrity had little or no effect in China, but was a source of 
irritation in Japan where it was considered to be an interference 
in China's domestic affairs. Shortly before this the United States 
Government had proposed that a suggestion, jointly with Japan 
and England, should be made to China as to the desirability of 
straightening out its affairs. The United States Ambassador was 
informed by the Japanese Foreign Minister of the latter's sur- 
prise that the United States should send such a note without 
awaiting Japan's reply to the earlier suggestion. 

Lansing-Ishii Notes. 

Among the great nations at war with the Central Powers the 
only one with which Japan had not recently negotiated an under- 
standing was the United States. Accordingly in August, 1917, 
Japan sent Viscount Ishii with a mission. On November 2, Sec- 
retary Lansing and Viscount Ishii exchanged notes to silence 
"mischievous reports." Prefacing a Denunciation of the open 
door policy was the statement: 

The Governments of the United States and Japan recognize that 
territorial propinquity creates special relations between countries, 
and, consequently the Government of the United States recognizes 
that Japan has special interests in China, particularly in the part 
to which her possessions are contiguous. 

Here again is to be seen the value for Japanese purposes of the 
United States' special concern in Mexican questions; the "terri- 
torial contiguity" of Bryan reappears in the phrase "territorial 
propinquity." The notes continue: 

The territorial sovereignty of China, nevertheless, remains unim- 
paired and the Government of the United States has every confi- 
dence in the repeated assurances of the Imperial Japanese Govern- 
ment that while geographical position gives Japan such special 
interests, they have no desire to discriminate against the trade of 
other nations or to disregard the commercial rights heretofore 
granted by China in treaties with other powers. 

The two Governments then reiterated their devotion to the prin- 


ciple of "the so-called 'Open Door' or equal opportunity for 
commerce and industry in China," and declared their opposition 

to the acquisition by any Government of any special rights or privi- 
leges that would affect the independence or territorial integrity of 
China or that would deny to the subjects or citizens of any country 
the full enjoyment of equal opportunity in the commerce and in- 
dustry of China. 68 

The Lansing-Ishii exchange of notes was negotiated secretly, 
the American Ambassador in Tokyo, the American Minister in 
Peking, the Chinese Minister in Washington, and members of 
the State Department other than the Secretary himself knowing 
nothing of the negotiation until its completion. Aside from the 
fact that unless there were a change in the policies of the two 
countries it was not clear why a frequent restatement should be 
necessary, the outstanding aspect of the Lansing-Ishii Notes was 
the inclusion of the concession with respect to the special in- 
terests created by contiguity. 

The notes, while emphasizing the contiguity of part of China, 
which would seem to cover Shantung as well as Manchuria, 
seemed to recognize Japan's special relation to China as a whole, 
and this was what Ishii was negotiating for. "Special interests" 
in China is a term of art in diplomacy, and carries particularly 
as to Manchuria because of the qualifying phrase used recogni- 
tion of a sphere of influence. Yet it may be doubted if the pub- 
lished texts reveal all that passed in notes and conversations, and 
in view of Lansing's undoubted desire to secure disavowal by 
Japan of hostile intentions toward China it may well be that he 
received assurances which, under the war conditions that allowed 
Japan so free a hand in the Far East, seemed to him calculated 
to safeguard the integrity of its helpless neighbor. 

Divergent views as to the meaning of the notes were imme- 
diately expressed: the Peking legations of the two Governments 
issued different translations of the term "special interest" the 
United States using a term denoting "special relation," Japan a 
term implying "special position" or "predominant interest." The 

es MacMurray, op. cit. t pp. 1394-1396. 


American Minister was authorized to inform the Peking govern- 
ment that the interests were economic, not political. Former Pre- 
mier Marquis Okuma now commented : 

Hitherto, America's activities in China were often imprudent and 
thoughtless. For instance, Secretary Knox's proposal to neutralize 
the Manchurian railway was, indeed, a reckless move. The United 
States also relegated Japan to the background when she sent the 
note of June 7 to China, advising that country concerning domestic 
peace. Thus America disregarded Japan's special position in China. 
We may understand that she will not repeat such follies in the light 
of the new convention. 64 

The effects of the agreement upon the position of the Japa- 
nese in Manchuria and Shantung soon became apparent. An im- 
perial government ordinance of October 1, 1917, appeared to sub- 
stitute civil for military administration in the former German 
area in Shantung, and, in addition, over the "railway zone" ten 
miles on each side of the Shantung railway and thus to signify 
permanent government and annexation by Japan. The State De- 
partment in Washington, with evident disapproval, inquired of 
Japan as to the reported change. Japan replied that there was a 
misunderstanding of terms, and gave the new administration a 
new name, but foreign mission schools in Tsingtao were required 
to conform to the Japanese Department of Education, and the 
Japanese authorities made an unsuccessful attempt during the 
spring months of 1918 to take a census of American missionaries. 
In the Lansing-Ishii Notes Washington was attempting to weaken 
the effects of the Twenty-one Demands upon China and of the en- 
suing treaties, but the notes impaired the prestige of the United 
States in the Far East. They were finally canceled on April 14, 
1923, consequent upon the signing of the Nine Power Treaty of 

Intervention in Siberia. 

While the United States and Japan were engaged in nego- 
tiating and interpreting the Lansing-Ishii Notes a crucial situa- 
tion arose in Siberia growing out of the Russian revolution. In 

64 Reinsch, op. cit., p. 811. 


the summer of 1917 an unofficial suggestion was made in Europe 
that Japan might be invited by England and France to intervene 
in Siberia. In December a Japanese note to several of the Allies 
suggested that Japan should enter Siberia to "preserve order" 
and protect the Allied interests in the Russian Empire, and in 
exchange receive certain exclusive concessions of an economic 
nature in eastern Siberia. All ambition for territory was dis- 
claimed. When a Japanese warship appeared at Vladivostok on 
January 12, the British and American Consuls expressed to the 
Japanese their pleasure at Japan's action ; the Washington gov- 
ernment, nevertheless, declined to give its approval to the plan 
for intervention. In mid-January a second Japanese warship, a 
British and an American cruiser, appeared at Vladivostok, and 
throughout the spring of 1918 Japan continued its diplomatic 
and military preparations. 

In the United States both governmental and public opinion 
were slowly turning toward approval of Allied intervention. 
Early in July the representatives of the Allied and Associated 
Powers, including the American admiral, Knight, issued a 
declaration at Vladivostok announcing the taking over of that 
city on behalf of their respective governments. The Japanese 
announced their friendship for Russia, their determination to 
respect "the territorial integrity of Russia and of abstaining 
from all interference in her internal politics," and declared that 
as soon as the Czechoslovak troops had been relieved they would 
"immediately withdraw all Japanese troops from Russian terri- 
tory." On August 3, the United States proposed to Japan a joint 
Siberian expedition, the objects of which should be the rescue of 
the Czechs in Siberia, protection from the Germans or Bolsheviks 
of the vast war stores at Vladivostok, and aid "to steady any 
efforts at self-government or self-defense in which the Russians 
themselves may be willing to accept assistance." 

Each of the Powers agreed to send not more than seven thou- 
sand troops, but Japan dispatched seventy-two thousand men 
into Siberia or to its borders. Extreme divergencies of policy and 
action, not always manifested in the most friendly manner, 
brought about strained relations between the Japanese and the 


Allied and Associated forces, and on November 16 the United 
States Government protested to that of Japan through its Am- 
bassador in Tokyo and the Japanese Ambassador in Washing- 
ton. The conclusion of the armistice lessened the strain. Japan 
withdrew almost half its forces and gave assurance of hearty co- 
operation henceforward with the general in command of the 
American forces in Siberia, numbering about eight thousand. 

The Tokyo government apparently found difficulty in con- 
trolling its military in Siberia, and during 1919 friction con- 
tinued among the interveners ; there were violent encounters be- 
tween the Japanese and the Bolshevized groups of eastern 
Siberia, and much bitterness resulted. Finally, on January 12, 
1920, the United States announced to Japan its intention to 
withdraw its forces from Siberia. This began on the seventeenth 
and was completed by April 1. During the same period France, 
England, Italy, and China withdrew their troops. On March 31 
Japan declared its inability to withdraw at once but stated that 

as soon as the political situation in the Russian Far East has be- 
come normal to the extent that there will be no danger for Korea 
and Manchuria, and life and property of our nationals will be pro- 
tected and normal railway communications restored, that then, after 
the evacuation of the Czecko-Slovak forces has been completed, our 
troops will be withdrawn from Siberia as early as possible. 05 

By an agreement of April 29, 1920, with the temporary Rus- 
sian government of the provinces, 66 the Japanese gained prac- 
tical control of the Maritime Province of Siberia, and early in 
July seized the northern half of Saghalin. This contravened the 
Japanese announcement, made when President Wilson proposed 
a joint expedition, that 

... in adopting this course, the Japanese government remain un- 
shaken in their constant desire to promote relations of enduring 
friendship with Russia and the Russian people, and they reaffirm 
their avowed policy of respecting the territorial integrity of Russia 
and of abstaining from all interference in her internal politics. They 

es Quoted by Morse and MacNair, op. cit., II, 937. 

66 H. K. Norton, The Far Eastern Republic of Siberia, p. 117. 


further declare that upon the realization of the objects above indi- 
cated (the relief of the Czecho-Slovak troops) they will immediately 
withdraw all Japanese troops from Russian territory. 07 

The United States in a note expressed surprise and disapproval, 
but although this created indignation in Japan, it had no appre- 
ciable effect on the position or policies of the Japanese military 
in Siberia. 

On May 31, 1921, Washington sent to Tokyo a note declaring 
that it could 

neither now nor hereafter recognize as valid any claims or titles 
arising out of a present Japanese occupation or control, that it 
cannot acquiesce in any action taken by the Government of Japan 
which might impair existing treaty rights or the political or terri- 
torial integrity of Russia, 68 

Political Settlements at the Peace Conference. 

Although the Japanese Government, by opening negotiations 
at Dairen with representatives of the Far Eastern Republic, 
tried to prevent the Siberian question from coming before the 
Washington Conference, the publication in January, 1922, by 
the "trade" delegation from the Far Eastern Republic, of a series 
of documents which indicated a Japanese-French agreement 
made necessary some consideration of withdrawal from Siberia. 
Baron Shidehara assured the Far Eastern Committee of Japan's 
determination to withdraw as soon as expedient. 69 Japan evacu- 
ated Siberia, 70 but its hold on Shantung outlasted Versailles. 
While most, if not all, of the other secret agreements of the 
Allies were reported to the American Government, no evidence 
has been produced that that Government or any member of 
its delegation had heard of the Japanese Shantung treaties be- 

67 Morse and MacNair, op. cit., IT, 932. es ibid., pp. 945-94G. 

eo L. I,. Schuman, American Policy Toward Russia Since 1917 (New York, 
1928); and Morgan Young, Japan Under Taisho Tenno (London, 1928), chapters 

70 "So ended a four-years' campaign to save Siberia from Bolshevism. It cost 
700,000,000 yen, thousands of lives, and infinite misery. It desolated, disorganized, 
demoralized, and ruined the whole country, and destroyed Japan's trade there, 
besides leaving a legacy of hatred" (Young, op. cit. f p. 278). 


fore going to Paris. The struggle between the Chinese and Japa- 
nese delegates to the Peace Conference over the disposition of the 
former German holdings in Shantung was protracted and severe ; 
Great Britain, France, and Italy redeemed their promises in 
the secret agreements by supporting Japan's claims. The United 
States, alone among the great Powers, had not promised support 
to Japan in its Shantung claim a fact which one of the Japa- 
nese delegates pointed out privately to Secretary Lansing, stat- 
ing that Japan would blame the United States if the Japanese 
did not receive Kiaochau, and making what Mr. Lansing called 
"an indirect threat of what would happen to the friendly rela- 
tions between the two countries if Japan's claim was denied." 71 
The Japanese also put forward a demand for the recognition of 
racial equality, a sincere demand but useful also in bargaining. 
On April 21, Baron Makino and Viscount Chinda called on 
President Wilson. The President renewed Lansing's earlier pro- 
posal that the German rights in China be ceded to the Allied and 
Associated Powers which should attempt a just disposition of 
them at a later date ; that with the exception of Yap, which the 
President considered should be international, the islands in the 
North Pacific were to be under a Japanese mandate, and that all 
"spheres of influence in China" should be abrogated. He sought 
cooperation among the Powers in order to prevent the exploita- 
tion of Asia and to maintain the economic and political integrity 
of China. Nevertheless the support of the Japanese claim by 
Great Britain, France, and Italy, and the fear that Japan might 
bolt the conference as Italy did temporarily, frustrated his 
efforts ; he abandoned his opposition, and the Treaty of Versailles 
transferred to Japan without reservation all German rights in 

7i R. Lansing, The Peace Negotiations, p. 253. 




FROM the beginning of the contact between the West and the 
Far East the major political difficulties have been involved 
with the feeling on each side that its own standard represented a 
universal norm of behavior or procedure upon which to build in- 
ternational relations ; each standard was considered not so much 
superior as indispensable. 

China, to begin with, "was more than a state in the western 
sense of the term. It was a system of international relations.' 51 Of 
enormous extent, China, under the Ming dynasty when the Portu- 
guese first arrived there, included fifteen provinces; under the 
Manchus there were eighteen provinces, each administered by a 
governor-general who, although accountable to the emperor, was 
supreme in his own right and free to negotiate with other states ; 
the western states, accustomed to the idea of unified authority, 
took offense when they found they were expected to negotiate 
with minor officials. Moreover, China's conception of itself as the 
one civilized state in a world of varying degrees of barbarism ad- 
mitted no obligation to hold commercial intercourse with other na- 
tions. This independence was met by another absolute, a preroga- 
tive of the industrial and commercial nations to trade wherever 
they would ; conflict was inevitable. One fruitful source of misun- 
derstanding was the conviction held by the Chinese authorities that 
the foreigners were interested exclusively in trade. This view was 
confirmed by the emphasis put by the foreign representatives on 
trade questions and by the fact that in the early days practically 
all the disagreements grew out of trade relations. How, for ex- 
ample, was it possible to bridge the gulf that at Canton in 1834 
separated Lord Napier and the local viceroy of the emperor? 
Lord Napier thought that as a representative of his sovereign he 

i A. N. Holcombe, The Chinese Revolution (1930), p. 63. 


should deal directly with the viceroy, but the Chinese had other 
views as to the proper way of conducting foreign commerce : 

The Celestial Empire appoints officials civilian to rule the people, 
military to intimidate the wicked ; but the petty affairs of commerce 
are to be directed by the merchants themselves. The officials are not 
concerned with such matters. . . . 

The great ministers of the Celestial Empire are not permitted to 
have private intercourse by letter with outside barbarians. If the 
said barbarian headman throws in private letters, I, the Viceroy, will 
not at all receive or look at them. . . . 

To sum up the whole matter: the nation has its laws ; it is so every- 
where. Even England has its laws; how much more the Celestial 
Empire ! How flaming bright are its great laws and ordinances ! More 
terrible than the awful thunderbolt ! . . . 2 

One of the "rights" involved in this conflict was no better than the 
other ; each attached to the concept of sovereignty. The difference 
was that Lord Palmerston, the British Secretary, was able to sup- 
port the western idea vi et armis. 

The Chinese were not impressed by their "barbarian" visitors. 
They did not realize or appreciate the full value of the westerners' 
skill in human organization and efficiency, and a short trial made 
them conscious that, although less effective in practical accom- 
plishments, they were at least the equals in intelligence of those 
who had burst in their doors, quicker-witted in reading character 
and in anticipating another's thought, more ingenious, subtle, 
meditative, and philosophical. While one type of westerner of- 
fended by his cool assumption of superiority, another, the more 
democratic type, appeared to the older Chinese rude and plebeian. 
Reserve being to them essential to politeness, this easy familiarity 
seemed offensive, at times insolent, and wanting in dignity when 
used with social inferiors. With it went the boisterous laugh which 
grates on the nerves of the cultured Chinese, and "chaff" or face- 
tiousness, being incomprehensible, seems the quintessence of vul- 
garity. Equally vulgar to the older Chinese was the westerners' 
tendency to express irritation or bad temper, which, containing no 
dignifying element of passion, was to them a mark of vulgar want 

2 H. B. Morse, International Relations of the Chinese Empire, I, 126. 


of self-control. Putting this estimate on "European" personality, 
the Chinese were the more warmly inclined to resent the violence 
with which contact with westerners was forced upon them, when 
the amorphous and disintegrating empire was compelled to ac- 
commodate itself to a new movement of world trade and to the ex- 
panding powers of white western nations. 

The Impact of Dynamic on Static. 

The impact has been mainly one of western culture on eastern, 
dynamic on static. Transformation, although marked with great 
confusion, is in the direction of modernization after the pattern 
of Euro-American organization. No longer do the nations of the 
Far East adopt the civilization of China, as they did for many 
Cathayan cycles. China's once apt pupil, Japan, has broken the 
mold by adopting western civilization, and China is perforce fol- 

Material changes are of course the easiest to make and the most 
inescapable: railroads, automobiles, airplanes, telegraphs, wire- 
less, factories, typewriters, and each mechanical innovation calls 
for others as an aid to its more effective functioning. Equally 
inevitable as a consequence of the changes in material civilization 
is a metamorphosis of the mental outlook. The railway traveler 
has another measure for time and more necessity for keeping to a 
schedule than the passenger on the canal. In the long run condi- 
tions shape social institutions, and those institutions shape social 
philosophies. These changes in material civilization and in mental 
outlook are creating a constantly enlarging community of atti- 
tudes between East and West ; from the West came machines, capi- 
tal for factories using regional materials, and cheap labor seeking 
local markets, the education that is integrated with the industrial 
age, and the political institutions that have evolved for the pro- 
tection and development of industry and commerce. 

But a wide gulf remains. The penetration of the West into 
China has encountered a resistance provoked by the threat of 
change, as well as by the upsetting due to the changes of the old 
ways of getting a living. First, impulses from the West collided 
with the inertia of the older generation who revered the culture of 


the Sung dynasty and saw in the coming of the new era a hasty 
destruction of the cultural heritages of the East. This expressed 
itself in the sphere of foreign relations in terms of a general anti- 
foreignism. The resistance of the modern generation is engen- 
dered by a positive belief in "Nationalism," the first of the Three 
Principles of Sun Yat-sen, or "China for the Chinese," and is ex- 
pressed in a sweeping demand for the renunciation of all unequal 
treaties. Railways, steamships, and motor buses take much busi- 
ness from those engaged in the older means of transportation, 
manufacture in factories cuts into the work of the old handicrafts- 
men, and similar consequences of the comparatively small amount 
of mechanization which has come in China have also aroused real 
if unorganized ill-feeling. 

The conservative effort to create an immobility that can with- 
stand the seemingly irresistible is the expression of the strains, 
disharmonies, and profound cleavages that are taking place in the 
Chinese social anatomy and physiology. The most perplexing 
problems in diplomatic, commercial, or missionary relationships 
with China arise from the internal maladjustments incident to the 
fact that, while at some points there is acceptance of the modes of 
western life, at most points the age-long culture still persists, and 
is strong enough to affect even the behavior and attitudes of mem- 
bers of those groups most susceptible to western contacts the 
student, merchant, and official classes. The young official who 
speaks a competent English, can use the terminology of modern 
political science, and has adopted western dress, is frequently not 
yet a free agent even as to his own marriage. In his advocacy or 
execution of measures affecting numbers of people he is held fast 
by the deep multiple roots of family-clan loyalty and the hal- 
lowed institutions of village life. 


The immemorial unit of responsibility in China and responsi- 
bility and authority have interchangeable meanings is neither 
the nation or the community at one extreme, nor the individual at 
the other, but the family. The family or sib consisted of three or 
four living generations, frequently occupying the same group of 


connecting houses. The oldest male of the oldest generation was 
the head, and possessed final authority in all matters. In the clas- 
sic on filial piety it is said that "there are three thousand crimes to 
which one or the other of the five kinds of punishment is attached 
as a penalty ; and of these no one is greater than disobedience to 
parents." A forty-year-old gateman in a Peking home would 
travel to his country home to "get permission from his father' 5 to 
change his job. Initiative and self-reliance are not begotten of this 
reverence. In the south the customary family units were particu- 
larly united and large, and the council of the elders reinforced and 
limited the authority of the head. 

The family thus organized was considered responsible for the 
behavior of its members, and for their debts and misdemeanors; 
part of the security of dealing with a Chinese merchant lay in the 
family pressure which could be brought to bear on the individual, 
and, in rare cases of default, in the traditional obligation of the 
merchant's family to pay his debts. The Ming dynasty introduced 
absolute monarchy and a period of bloody horrors; 8 both its 
penal code and that of the Manchus provided vicarious punish- 
ment of a member of the family for the absconding debtor, and a 
traitor's execution called for the extermination of his whole clan. 4 

The resistance of westerners to the jurisdiction of officials en- 
gaged in imposing such obligations was not unnatural. The 
Chinese on their side found a certain comfort in a solidarity which 
diminished the burden of individuality and personal responsibility 
and were easily offended by the philosophy of the early Christian 
missionaries, with its insistence on the individual responsibility of 
each man or woman for his or her own behavior. Any disturbance 
of the traditional social attitude in consequence of conversions to 
another faith was regarded with great alarm by the authorities. 
Such an anomaly retarded the work of the Catholic church in the 
eighteenth century. By the Bull of 174$, and subsequent acts of 

a R. Wilhelm, Kultur Geschichte Chinas (Muenchen, 1929), p. 274*. 

4 Westerners, astonished at a liability resulting from kinship and extending 
even to criminal offenses, ignore the fact that in western jurisdiction exists the 
doctrine of respondeat superior, as in the case of an employer's liability for certain 
torts of his servant, the doctrine of collective liability arising from the negligence 
of a municipality, and the common law escheat of property attending attainder for 


that century, the Pope settled the "rites" question which forbade 
ancestor worship by Chinese Christians: "The Catholic Church 
had decided not to compromise its customs or adapt itself to what 
it deemed superstitions in Chinese life. 9 ' 5 

As in the case of the family, so in the villages the elders ruled 
through headmen and counselors. Old age and well-established 
position were supreme in the villages of loosely grouped clans in 
the north and in the large village towns of blood relatives in the 
south. Youth or even middle-age had little opportunity to gain 
active experience in the direction of community affairs except by 
observing the doings of the elders. 

As 80 to 85 per cent of the people lived in these rural areas in 
villages grouped about a market town, or in larger towns with sur- 
rounding fields the whole area having perhaps not more than a 
twenty-mile radius the life of the region was economically, so- 
cially, and politically self-sufficient. Arthur H. Smith likens every 
Chinese to "a character in one of Richter's novels who assumes the 
first meridian to be through his own skull." The people raised their 
own food, made their own clothes, and built their own houses ; they 
had no roads and of course no newspapers. 

The good people [said Lao Tze] are those who live in countries so 
near to each other that they can hear each other's cock crow and dog 
bark and yet never have had intercourse with each other during their 
lifetime. 6 

The localism nourished by these conditions prevailed also in the 
industrial and commercial guild life of old China; every one of 
forty-eight commercial craft and professional guilds of Peking 
drew its membership solely from the city and nearby area, i.e., as 
in the case of the agricultural units, from the economic area prac- 
ticably workable on a foot-pace basis. 

Distribution of Population. 

These psychological considerations are related to the land and 
population problem. This, as has been repeatedly pointed out, 

s K. S. Latourette, History of Christian Missions in China, p. 152. 
e Quoted from Paul Monroe, China , A Nation in Evolution, p. 112. 


concerns the distribution of the people rather than their numbers. 
While there is not sufficient food available on the present basis of 
production adequately to meet the subsistence needs of the people 
living in the central lowlands, there are vast areas of arable, 
sparsely populated land in Manchuria and far western China. If 
the maritime customs figures of 451,842,000 for the population of 
China in 1928 are taken, the density of population of the eighteen 
provinces and Manchuria is 238 per square mile, a figure much 
lower than that of Belgium, England, Japan, Italy, or India. 
This figure, however, does not indicate the real condition of over- 
crowding which affects most of the people. Half of the total popu- 
lation occupy but a quarter of the total area of China. In rice- 
growing Chekiang and Kiangsu sixty-five villages show a density 
of 980 to 6,880 per square mile; the Shantung wheat-growing 
areas have a density of 1,800-3,000 and a number of other wheat- 
growing areas of North China show 550 to 2,010 per square mile. 7 
These figures represent a density higher than that of any other 
nation. In vast areas of central and northern China the law of 
Malthus, that "the power of population is infinitely greater than 
the power in the earth to produce subsistence for man," operates 
with terrible effect. 

For hundreds of years the Chinese peasants have subsisted on a 
scale which seems woefully insufficient when judged by western 
standards. Chinese dietaries are composed mainly of cereals and 
legumes, the proteins from which are of much lower nutritive value 
than those from milk, eggs, and meat. Yet even according to 
Chinese standards it has been estimated that one out of every eight 
Chinese, or fifty million people, are affected by famine conditions. 8 
The Chinese, because of the environment that has determined his 
type, is not naturally a pioneer. He depends upon a town economy, 
and that in Manchuria has been provided in part by the railroad 
construction of the Russians and the Japanese. But more than that 
has been necessary to draw him into the fertile northern plains. 
The Chinese is attached to his home because it is the burial ground 
of his ancestors and the abode of their spirits and will in turn be 

7 Walter H. Mallory, China; Land of Famine, p. 15. 

8 Fang Fu-an, China Critic, February 6, 1930. 


his own ; he prays that he may have many sons to care for that 
resting place, whether in the family temple or at the burial mounds 
which sometimes occupy one-fourth of his meager holdings. He 
cannot easily be persuaded to leave an area starving from flood 
or drought or congestion and go to the fertile fields of Manchuria. 
There his spirit would be lonely ; the graves of his forefathers are 
his home. But starvation and an oppression not hallowed by tradi- 
tion have combined to weaken the hold of the home tie. Of late 
years escape from these conditions has been found in wholesale 
migration into the virgin fields of Manchuria. For the past four 
years fully a million Chinese have each year passed beyond the 
Great Wall to establish new homes in the granary of Asia; the 
famine years of 1928 and 1929 saw considerably larger move- 
ments than this, and the movement is continuing. The wonder, 
however, is not that the movement is so large and it is the largest 
movement of people in the world but that it is not much greater. 
In planning reforms, in determining the extent and rapidity 
with which fundamental changes in behavior and outlook are pos- 
sible in China today, such considerations cannot be neglected by 
any government. Semi-starving and undernourished people take 
little interest in general political principles. Extensive progress in 
education, public health, active participation of citizens in the 
duties of citizenship, must wait for some solution of the food and 
population problem ; mob violence and anarchy are the correlative 
of a poverty-stricken countryside, and farmers are becoming 
bandits in many regions, particularly in Kwangtung, Hunan, and 
Kiangsi, in central China, and in Shensi and Kansu in the famine- 
ridden northwest. Yet while this is true of the masses of people in 
the interior no one can fail to be astonished by the progress made 
by the modernizing groups. 

The Scholar Caste. 

Within the limits of its functions the larger national interest of 
the scholar-ruler class was in contrast to the localism of agricul- 
tural and industrial groups. Indeed, under the old regime, through 
fear of the corrupting power of the local family bonds above em- 
phasized, no mandarin could be appointed to a regular official post 
in his native province. The temptations of scholarship were 


strong; wealth, social prestige, power, official position, and wor- 
ship after death were the reward for the successful scholar, who by 
his mastery of the classical literature was able to pass the provin- 
cial or national examinations. The ambition of the farmer's or the 
artisan's son was to lay aside his blue tunic for the scholar's gown, 
and to devote himself to the classics and to employment with the 
slab of ink and the camel's-hair brush. Successful devotion to 
learning led to official position, from prime minister to clerk in the 
local official's office, to public esteem and to the possibility of great 
wealth and power ; one may see today poles erected at a village en- 
trance as a thank offering for the success of a village youth in an 

The ancient examination system, designed to discover the tal- 
ented and to make them the rulers under the emperor, was founded 
during the T'ang dynasty (618-906 A.D.) but the general prac- 
tice had already been in existence a long time. Though the system 
was abolished by the Empress Dowager in 1905, the practice of 
three thousand years has had enduring effects. The inclusion in 
the "organic law" of the present government at Nanking of an 
Examination Yuan is an evidence that the fundamental idea of a 
civil service examination has not been abandoned. 

Men of talent and high mentality have administered affairs, but 
their interests have lain in the field of theoretical studies. The 
highest mental activity was concentrated upon the history, poetry, 
philosophy, and ethics of the sages. Brought up in theoretical 
studies the intellectual leaders of China naturally found practical 
and technical pursuits distasteful; commercial and industrial en- 
terprises did not attract the keenest minds. Leadership lay in the 
field of erudition, and success depended upon mastery of literary 
forms rather than of the substance of thought. The successful were 
stereotyped by the conditions of their success; the unsuccessful 
became "expectant officials," as the young scholars in Peking used 
to write on their calling cards. Since the days of Confucius the 
accepted classification of the relative importance of human pur- 
suits in China has been: scholars (officials), farmers, laborers, 
merchants. Soldiering has not been recognized as an honorable 
calling. An interesting commentary on the difference in values 


between China and the West results from comparing the seating 
arrangements for a London Lord Mayor's dinner; the Church 
heads the table, followed by the Navy, the Army, the civil officials, 
and finally the scholars, with merchants and professional people 
together at the end of the list. 

The scholar's or cleric's tendency to put into Chinese characters 
a full description of the task to be undertaken and the methods of 
solving it and to believe that thereby an effective attack upon the 
problem has been made a tendency which finds more than one 
exemplar between the Levant and the Yellow Sea thrusts its 
head into the administrative life of the Republic of China. Every 
ministry has its new and elaborate plan. The Public Health regu- 
lations, for example, cover everything from maritime quarantine 
stations to minute regulations for the selling of foods ; the practi- 
cal next problem is not so much considered as the ideal state aimed 
at as the goal. If all paper plans were effectively put into execu- 
tion the nation would be modernized and reorganized in a brief 
period, but the intellectualizing of the general situation frequently 
draws off the energy needed for critical problems. There has been 
little effort to refer reorganization plans to the permanent forces 
of city or village life and to the attitudes and interests of the men, 
women, and children living there. This emphasis on the idealistic 
paper plan makes Chinese dealing with the practical-minded for- 
eigner extremely difficult. "We demand immediate relinquishment 
of extraterritoriality," say the Chinese, "and you must grant it to 
us for we have a thoroughly modern legal code which has been 
adopted by the government." "But," says the foreigner, "the code 
is valueless, for you have not made it work." 

Yet although a classical education which emphasizes taste and 
the value of memorizing has many defects as a training for ad- 
ministrators, the mind that is master in one field is, on the basis of 
averages and therefore presumptively, the master in other fields, 
and the Chinese are not unlikely to retain the leadership of the 
keenest minds trained in more modern methods; such a continu- 
ance of type might well preserve them against some of the follies 
and untidinesses of democracy. The leaders themselves recognize 
this, and the significance of the shift in the educational system and 


the resultant change in the mental outlook can be grasped only 
when the importance of the scholar class in China is understood. 
The rise of the military and of the industrialists is an important 
sign of the times, but the masses of the people are still influenced 
principally by the intellectuals. Even the students are listened to 
with respect. They played a large part in creating the emotional 
outburst against the corrupt Manchu regime that hastened its 
overthrow at the beginning of the Republic. Student agitation, 
too, was vitally effective in the overthrow of the Anfu regime in 
Peking in 1919 and in the antiforeign agitation in 1925. Most of 
the antiforeign boycotts were effective as long as they had stu- 
dent support. A party of American students traveling in China 
were asked more than once by Chinese students by what kind of 
organization in the United States they controlled their govern- 

Another inveterate principle was that government should as far 
as possible refrain from establishing such rules as would confuse 
the simple-minded people and interfere with their folkways. Re- 
form measures of a central government have always had a hard 
road in China. Confucius said: "The people are difficult to gov- 
ern because the officials are too meddlesome." In recent years at 
least, outside of paying taxes regularly and appearing before the 
magistrate for trial in major criminal cases, the villagers have 
insisted on living a life of their own with practically no relation to 
the government the village headman and elders conducting all 
local affairs, governmental, judicial, and educational. When an 
official transgresses the universal standards of justice, the people 
feel justified in violent protest, even in expelling him and in get- 
ting someone who will rule as a ruler should. "If the people have 
no faith in their ruler, there is no standing for the state," said the 

Somewhat apart from the scholar-ruler class were the economi- 
cally solid middle-class people, roughly describable by the term 
"the gentry." The possession of substantial property was in gen- 
eral the criterion of inclusion in this group the position depend- 
ing upon the amount of property. Many of the men in this class 
were ex-officials or the descendants of officials. Others had risen 



from the ranks of simple peasants or day laborers. In the cities, 
these men frequently were the proprietors of shops or businesses 
of various sorts ; in the rural regions they were the larger land- 
holders. The men of affairs, particularly those in the same busi- 
ness, were generally associated in more or less loosely organized 
guilds ; the "co-hong merchants" who were designated to deal with 
the earlier foreign traders at Canton were such a group, and the 
bankers, a large proportion of whom throughout the country 
were men from Shansi province, similarly had their own organiza- 
tion. These gentry provided in the main the link between the offi- 
cials and the ordinary people ; taxes and special levies were paid 
through them ; they interpreted and usually saw to the carrying 
out of official orders ; they served, in brief, as the skeleton of the 
country, the officials being the nerves and blood vessels and the 
people the flesh. 

The ordinary people, especially those engaged in particular 
occupations, also had their own guild organizations the carpen- 
ters 5 guild, the butchers 5 guild, the porters' guild, even the beg- 
gars 5 guild, in the cities; the Yangtze junkmen's guild on the 
stretch through the gorges, the chair carriers 5 and the carters 5 
guilds in various regions. These guilds gave a cohesion to the 
workers in their special occupations which acted as a stabilizing 
factor, and also helped materially to protect the individual work- 
ers from exactions by the officials and the gentry. 

These fundamental domestic factors which affected not only 
foreign relations with China but also the modernization of the 
country have been spoken of as pertaining to the country as a 
whole. But the differences between north and south must not be 
forgotten. The south Chinese are restless, colonizing and adven- 
turous, commercial, progressive, not to say revolutionary in poli- 
tics, receptive of western ideas ; the northerners are more military, 
cohesive and conservative, tolerant of the evils of existing govern- 
ment. But for north and south alike change is inevitable and its 
signs are apparent. The obstacles that retard widespread change, 
and create tension and possible conflict as change comes have been 
sketched. The cause of this change from old to new and the man- 
ner of its coming must next be summarized. 



WELL before the establishment of the Empire at Rome, flourish- 
ing trade was carried on between the eastern end of the Mediter- 
ranean basin and the people of China. Over the ancient caravan 
routes across central Asia, silks and other products moved west- 
ward, and slaves, certain kinds of gems, and some food plants 
(such as the watermelon) were transported to the East. Bud- 
dhism came up into China from India early in the Christian era, 
bringing with it not only China's first broadly conceived reli- 
gion but also vital new art impulses. Nestorian Christians flour- 
ished around the imperial capital in the seventh century A.D., and 
there was a thriving Jewish community in Honan five hundred 
years later, although both virtually disappeared and left no sig- 
nificant trace in Chinese development. The spread of Mohammed- 
anism up into central Asia in the seventh century swept the fierce 
adherents of this religion into northwestern China, where they 
have been a racially and culturally distinct and important element 
in the population ever since. In the fourteenth century Catholic 
missionaries entered the country, and subsequently secured a pow- 
erful position at court, only to be ousted from the country when 
the feeling grew that they were the advance agents of political 
and military aggression; meanwhile, however, they had contrib- 
uted not a little to the development of astronomy and mathemati- 
cal studies in China, and had laid foundations for the spread of 
Christianity; these were partially buried but not completely de- 
stroyed during the following centuries. In the sixth and seventh 
centuries Arab traders had found their way by sea, around India, 
to the southeastern ports, thus opening up new trade routes which 
were followed by the Europeans on their voyages to the East be- 
ginning in the sixteenth century. 

While China was thus in commercial and cultural contact with 
the Mediterranean basin from well before the beginning of the 
Christian era, the development of its cultural and economic life 
went on virtually unaffected by ideas or processes from the West. 
The one really significant contribution to Chinese development 
from outside the country, up to the beginning of the nineteenth 
century Buddhism, with its associated art impulses came from 


another part of Asia, namely, India. Mohammedanism, too, was 
Asiatic in origin. 

The dynamic, outward-moving tendencies of the modern west- 
ern nations, however, carried modern western civilization with an 
irresistible impact to China's shores. The stream of western ways 
of doing and thinking has been flowing into China for over a cen- 
tury and a quarter, first as a tiny trickle through a few centers in 
the south and then as a steadily growing flood through innumer- 
able channels. The material usages and the social organization of 
traditional China, forced out of its long-established self-suffi- 
ciency and quietism, have been giving way before the aggressive 
nationalism, emphasis on individual rights and responsibilities, 
the superior military organization, the commercial necessities, 
and, most basic of all, the scientific achievements of the western 
world; in this diffusion process, an ancient culture, hardened by 
the traditions of centuries and fortified by the philosophy of ac- 
ceptance and worship of the status quo, after a century of resist- 
ance has succumbed to the impact of a civilization which con- 
stantly improves devices for the utilization of material nature, 
enriches its votaries by the substitution of machine for man labor, 
and by ever seeking new sources of raw material and new markets 
for surplus manufactured goods insists on bringing the entire 
globe into its system. 

Trade was the basis of the first contacts between the modern 
West and China, and trade has remained ever since not only finan- 
cially by far the greatest factor in the relations between China 
and the rest of the world but also one of the principal channels 
through which new ideas and methods have poured into the coun- 
try and contributed to its awakening. The presence of foreign 
business men, with their new ways and standards of living, in the 
many important interior cities where the foreign firms have estab- 
lished agencies, brought western ways next door to millions all 
over the country; and the standards of city administration and 
building set by the foreigners in the concessions at the treaty 
ports have been of incalculable importance in revolutionizing 
Chinese conceptions of what should and could be done with cities. 
Business methods, in banking, buying, and selling, in transporting 


and handling goods, as demonstrated in China by the foreign 
firms and as learned by the many Chinese who have gone abroad 
to study or for business, have also profoundly affected the 
methods of the Chinese business men and stimulated both thinking 
and acting in the economic field. 

While trade brought westerners to China and has played a 
large part in the remaking of that country, it has also been the 
means of opening still another channel of new ideas. The Chinese 
for generations, particularly those in the southern provinces, have 
been emigrants, going to neighboring lands in search of better 
economic opportunities. During the past century this movement 
has been accelerated; thousands upon thousands, running into 
millions, have gone from China not as students or business men 
but as simple laborers bent on securing better opportunities than 
their crowded home villages afforded. Siam, the Straits Settle- 
ments, Burma, the Philippines, Hawaii, the United States, South 
America, Australia, even South Africa, have seen these thrifty 
workers pour in, settle down, save, and gradually build up wealth. 
No one knows exactly how many Chinese have gone abroad in this 
way, but these emigres have had a marked influence in the awak- 
ening of China. They have written home about their new experi- 
ences ; many, after accumulating what to them is a fortune, have 
returned home to live, bringing with them naturally a widened 
outlook ; not a few have contributed substantially to the financing 
of the various movements looking toward political changes (Sun 
Yat-sen, in fact, received from overseas Chinese most of the 
money for his revolutionary activities both before and for the first 
few years after the establishment of the Republic), and in recent 
years wealthy Chinese abroad have given large sums for the de- 
velopment of education in their homeland. 

The Missionaries. 

The penetration of the Far East was not only military, politi- 
cal, and economic, but also religious. 9 To the great mass of the 

e The State Department estimate of American missionary investments in China 
is $52,109,073; private estimates give the figures as about $80 million; C. F. Remer, 
American Investments in Chma f p. 33. Also see discussion of American invest- 
ments in China, pp. 243-254. 


Chinese people the violence of the impact was at first more signifi- 
cant than the elements of the culture for which the way was 
opened. There was a pell-mell of rifles, cotton cloth, sewing ma- 
chines, and Bibles, and the heralds of Christianity enthusiastically 
sought converts to the religion of Jesus, variously interpreted by 
the Roman Catholic and the many Protestant faiths. 

In their zeal for the uplift of the Chinese people, and their sin- 
cere belief that since the only salvation for themselves lay in the 
way of their religion so must it be also for the Chinese, some 
groups sought, successfully, to have special privileges for their 
propaganda and special protection for their converts written into 
treaties. The troops and naval forces of the western Powers, al- 
though rarely made use of because of the remoteness from the 
coast at which so many missionary stations lay, became the poten- 
tial support for the ministers of the gospel of peace. Moreover, 
some missionaries, seeing in the Chinese only lost sinners in a 
heathen world, underestimated the value of an ancient culture; 
others seemed to associate the gospel of Jesus with the factories 
and the governmental systems of the West ; some there were, for- 
tunately, who through profound appreciation of Chinese culture, 
became the chief interpreters of East to West. 

The question of "religious freedom," which in this case meant 
the right of Christian missionaries to preach unmolested and to 
make converts, own property, build churches and hospitals, to 
rent or build houses, and to open burial grounds anywhere in 
China, early became the subject of treaty stipulations. The first 
treaty, that of Nanking in 1842, granted the right to preach and 
teach. The Treaty of Tientsin of 1858 opened wide territories to 
trade and travel, and the missionaries pressed forward into these 
new regions. Treaties signed between 1858 and 1903 with various 
western Powers reiterated, redefined, or amplified this right to 
spread Christianity. 

The Imperial Chinese Government from time to time issued 
special decrees dealing with the treatment of missionaries. On 
June 13, 1891, a decree was issued "ordering protection to be 
afforded to foreign missionary establishments," and a decree of 


August 9, 1895, ordered "protection of missionary establishments 
and suppression of idle stories and suspicion." In 1898 an edict 
ordered "officials to guard carefully against missionary troubles 
and to afford 'thorough protection to missionaries passing to and 
fro. 5 " These orders were ignored during the Boxer uprising of 
1900, but renewed later. 

Pledges of protection of missionary life and property were re- 
peated at intervals by the Republican government, and by indi- 
vidual military commanders in the years which followed the over- 
throw of the Manchus. The legal rights of the missionaries con- 
tinued substantially unchanged until, in 1928, the Nationalist 
government issued, through the Foreign Office, special regulations 
regarding foreign property which, among other things, canceled 
the right of missionary bodies to own land, though continuing the 
right to lease. Since this was a unilateral declaration and con- 
flicted with certain treaty provisions still in force, the question of 
the legality of the regulations arose and still remains unsettled. 

In recent years the missionaries as individuals, and through 
their organizations, have increasingly repudiated any claim to 
special privileges provided by treaties. The feeling is strong 
among them that if Christianity is to secure a real foothold in 
China it cannot rest on foreign authority. An illustration of the 
change in attitude is furnished by the different courses taken fol- 
lowing the killing of missionaries and the destruction of mission- 
ary property during the Boxer uprising in 1900 and during the 
disturbances in 1926 and 1927. Practically all of the missionary 
organizations, and many individuals, put in claims for compensa- 
tion for loss of life and property when the representatives of the 
foreign Powers were determining the indemnity to be exacted 
from China for the Boxer uprising; in only individual and iso- 
lated cases were similar claims presented when the assessment of 
losses in the 1926-27 troubles began, even though the property 
losses then probably were considerably higher than in 1900. 

Although the Catholic missions have a longer history in China 
than those of Protestant denominations, they have not been as ac- 
tive in specifically evangelistic work, nor in the development of 


educational and similar activities in conjunction with the specific 
teaching of religion. An exact estimate of the relative strength of 
the Catholics and Protestants is somewhat difficult because of the 
difference in the way records are kept. The most recent available 
figures give approximately 5,000 Protestant and 3,500 Catholic 
foreign missionaries. Including Chinese freres, nuns (foreign and 
Chinese), and other regular members of the Catholic missions, the 
total of workers is 7,500. The ordained Protestant Chinese 
workers number approximately 1,250. Protestant communicants 
number not quite 400,000 while the Catholics have nearly 2,500,- 
000 on their rolls. 10 

Other Foreign Pioneers. 

In the past quarter of a century the Protestant movement has 
added to the enthusiasm for purely evangelistic work, which char- 
acterized its earlier stages, a growing interest in medical work 
general medical practice, the founding and conducting of dispen- 
saries and hospitals, and the training of Chinese physicians and 
nurses and educational work, consisting principally of the 
founding and conducting of western style schools from kindergar- 
ten to university and the training of Chinese teachers. As the 
movement gathered momentum, the missionaries of religious faith 
became the pioneers also of medical science, modern education, 
and social reform, and the chief medium for the diffusion of west- 
ern ideas. 11 More recently the Catholics have been turning their 
attention to such means of establishing contacts with and helping 
the people. Protestants and Catholics alike emphasize increasingly 
the need for Chinese leadership in the Christian movement in 

Both the Protestants and the Catholics have established insti- 
tutions of higher learning in China, in addition to numerous 
schools of lower grade. The Protestant colleges usually aim to 

10 Figures summarized from China Year Book (1929-30), pp. 497-518. 

11 Some of the later enterprises in the medical and educational field are not 
specifically linked up with the missionary movement. The most conspicuous of these 
is the Union Medical College in Peking, taken over and reorganized by the 
Rockefeller Foundation in 1919-21, into the maintenance of which as a first-class 
medical school the Foundation puts annually nearly $1,000,000. 


provide a general education while the Catholics concentrate more 
on special preparation for the priesthood or specifically religiotfs 
work in other lines, although the Catholic University, established 
by the American Benedictines at Peking in 1923, offers general 
courses. So far the Catholics have not permitted coeducation in 
their schools, except in the lowest grades, while the Protestants 
have coeducational colleges and also a special college for women. 
The specifically missionary Protestant colleges number some 
twenty-three, with an enrolment of about 4,000. The Catholic 
work in this field is considerably less. 

Taking the hours of instruction offered as a measure, the great- 
est emphasis was laid on the natural sciences and mathematics, 
with language a close second and the social sciences next. In all 
these institutions until recently, and in some of them still, reli- 
gious instruction (Christian) has been required; those that have 
registered with the Chinese Government in accordance with the 
new laws, however, have been compelled to make such instruction 

Chinese Students Abroad. 

Foreign impacts on China were productive of the same conse- 
quences as in Japan; they led to an exodus of Chinese students 
who in turn were the main influence in bringing about the present 
intellectual awakening of the youth of the country. In the middle 
nineties China's youth and a few of the more progressive national 
leaders came to realize the weakness and decadence of China ; the 
easy victory of Japan and the increasing pressure by western na- 
tions for special privileges forced home the conviction that some- 
thing fundamental must be done. 

At first most of these eager inquirers went to nearby Japan, 
whose language was easier to learn, and whose living costs were 
lower; the popular cry in 1896 after the defeat of China by 
Japan, was "What Japan has done, China can do," and by 1906 
some 12,000 Chinese students were studying in Japan. But many 
of these were unprepared for serious work in engineering, law, 
military science, medicine, and other exacting subjects, and of 


the private schools started for their instruction a large number 
turned out to be merely for their exploitation; for this reason 
thousands of Chinese students left Japan. The following figures 
give the number of Chinese students in colleges and schools in the 
United States since 1898 : 

1898 6 

1905 106 

1906 300 
1910 650 
1914 847 
1918 1500 12 
1921-22 1255 
1922-23 1507 
1926-27 1298 18 
1927-28 figures unavailable 
1928-29 1287 18 
1929-30 1263 14 

The steady increase until 1918 corresponds with the rising tide of 
interest in western ideas. The decline in the number of students 
in the United States since 1924-25 may be due to the increasing 
facilities for higher education in China, and to the growing con- 
viction among educated Chinese that sending students abroad too 
young has a denationalizing influence whereas foreign study by 
graduate and experienced students is more fruitful. 

Uses of Remitted Boxer Indemnities. 

The chief single source of money by which students could be 
sent to America in recent years has been the American Boxer In- 
demnity Fund. In 1911 President Roosevelt procured the remis- 
sion of $10,785,286.12 of the American share of the Boxer In- 
demnity Fund (originally $24,440,778.81 ) ? the proceeds of which 
were to be devoted to educational purposes in China and the send- 

12 Figures by Tsi C. Wang, The Youth Movement in China (New York, 1927), 
p. 67. 

is Figures from the Institute of International Education. 

14 Figures from National Council of Y.M.C.A. 

*The figures from the different sources are not comparable. 


ing of Chinese students to America ; with this money, Tsing Hua 
College was founded. The first President, Tong Kai-son, himself a 
graduate of a New England high school, engaged a group of 
American high-school teachers to form the western division of his 
faculty in 1911, and Tsing Hua College became an American 
style preparatory school, educating young men, carefully chosen 
from all the provinces, for entrance into American colleges. Its 
present policy is that of sending only selected graduates for ad- 
vanced study. This institution has, since 1928, become coeduca- 
tional ; from the first, a few women students selected by competi- 
tive examination were sent yearly to the United States, and now 
its women graduates are being sent on the same basis as men. Prior 
to 1928 all graduates of Tsing Hua had the right to go to the 
United States for further study, with their expenses paid, if they 
so desired. Since then, selection has been by competitive examina- 
tions which may be taken by anyone in China without reference to 
previous school attendance or sex. Tsing Hua graduates have no 
special privileges in these examinations. 

On May 21, 1924, Congress authorized the remission of the bal- 
ance of the Indemnity Fund, as from October 1, 1927. This 
amounted to $6,137,552.90. A special organization, the China 
Foundation for the Promotion of Education and Culture, with a 
self -perpetuating board of ten Chinese and five Americans, was 
formed to handle this money. This board, by action of the Chinese 
Government, has been made the trustee for that portion of the 
first American Boxer Indemnity remission (that of 1908) which 
is being set aside for a permanent endowment fund for Tsing Hua 
University. In the handling of its own funds, the China Founda- 
tion has concentrated on the promotion of scientific studies in the 
secondary schools and a program for the development of scientific 
research. The Foundation has a department of social research 
which has been conducting studies in the socio-economic field, and 
it makes grants to educational enterprises such as libraries and 
the Mass Education Movement. In the matter of Boxer Indemnity 
remission, several other Powers have followed, either in whole or in 
part, the example of the United States. 


Effects of Western Education. 

The marked effect in the political sphere of increasing western 
education first became evidenMn the abortive coup d'etat of 1898. 
Influenced by a small group of scholars from Canton, men who 
were convinced that rapid and complete acceptance of western 
methods and ideas was the decadent nation's only hope, the young 
Emperor Kwang Hsu issued a series of edicts for the reorganiza- 
tion of the central government, and for financial, military, and 
judicial reforms. The movement was premature and represented 
only the desires of a few intellectuals; the time was not ripe for 
wholesale westernization. 

The reactionary Empress Dowager and her State Council en- 
couraged the Boxer Rebellion of 1900 which expressed in terms 
of violence the hostility of fanatical groups to aggressive west- 
ernization and exploitation. Its collapse and the ensuing severe 
penalties convinced the Empress and the leaders of the country 
alike that increasing contacts with the victorious western nations 
and modernized Japan were unavoidable and westernization in- 
evitable if China, as a nation, were to survive; Japan's victory 
over Russia in 19041905 reinforced the reluctant conviction. To 
this was due the abolition in 1905 of the old examinations and the 
series of reform edicts of 1906, followed by the nine-year program 
of constitutional reform beginning in 1908. 

But the new wine burst the old bottles. In spite of the promul- 
gation of paper plans, the slowness and corruption of the decadent 
court and the impatience of the utopian revolutionaries made or- 
derly and gradual change impossible; the Manchu court was 
eliminated by triangular negotiation between the Sun Yat-sen 
Nationalists, Yuan Shih-kai, and the imperial family, and the re- 
form project collapsed. 

Again in 191112 revolution failed to achieve any considerable 
success in its objective of thoroughgoing modernization because 
evolution in the interests, ideas, and attitudes of a people of fixed 
and ancient culture was not sufficiently rapid to support the com- 
plete political program of eager revolutionists. But through the 
complications and chaos of the next eight years the forces of in- 
dustry, commerce, and education made ready for the awakening of 


1919, when for the first time modernism gave evidence of having 
become indigenous, and for the political-social revolution of 
1926-28 when the moderns took hold of the central machinery of 
government. In Nanking today practically every government of- 
fice is in charge of modern-minded men, with a modern trained 
staff . So far as conscious direction goes, the entire government 
program can be said to be of a modern nature with the one great 
exception of the military policy of the president. That the new 
public health rules, school system, fiscal system, labor laws (fully 
formulated) are not bng put into effect, except in a limited area, 
should not discount the fact that the entire "set" of the govern- 
ment is now toward modernization. This is a tremendous fact and 
has the future with it. There is no appreciable desire in the coun- 
try for a return to the monarchical form of government. None of 
the Nanking leaders wishes to go back to the old system, so far as 
general policy is concerned. The habits of graft, corruption, and 
the methods of the military war lords still control the action of 
many, but avowed policies and hopes are of another order ; in the 
Ministry of Finance, for example, there has been a sincere effort 
to learn how Chinese finance can be modernized and standardized. 


MANY historians have commented upon the uniformity of condi- 
tions, the similarity of grievances in the different regions of pre- 
revolutionary France, as disclosed by the colliers of the parle- 
ments. A similar uniformity existed in the Chinese communities 
until well into the nineteenth century and continues even today 
outside of the treaty ports, a few teaching centers, and similar 
areas where the newer influences have had an opportunity to im- 
pinge upon the old folkways. Such variations in custom as there 
were existed mainly because of basic racial or economic differences 
among the various parts of the country. Now that change in the 
multifarious aspects of the nation's life, whether benign or blight- 
ing, has begun, it meets varying degrees of resistance, finds vary- 
ing channels for penetration, and proceeds at varying speeds. 

The enthusiasm of Young China, not infrequently expressing 
itself in agitation against old evils with little consideration of the 


specific steps by which these can be remedied but none the less lit 
and kept burning by a patriotic desire to see China noble and 
powerful, is one of the vital forces driving toward the moderniza- 
tion of China. The desire of the moneyed middle class, the gentry, 
in the cities as well as in the rural districts, for stability in politics 
and the opportunities for wider-reaching trade which modern 
communications and business methods give is another potentially 
powerful force toward modernization even though as yet the gen- 
try are only beginning to assert themselves. The press, for all its 
venality and in spite of the widespread illiteracy, is a potent fac- 
tor because it is a means by which many people in widely separated 
areas are set to thinking about the same things at the same time ; 
and the establishment of telegraph service throughout the coun- 
try, through which events in the principal centers are promptly 
reported, commented upon, and made significant for the nation 
rather than simply for the areas where they occur, is of almost in- 
calculable value. The break-up of the older workers' guilds with 
the introduction of modern industry and the concentration of fac- 
tory workers many cut loose from their family ties by the condi- 
tions under which they must work is still another vital factor, 
especially as these changes give the opportunity for spreading 
among the workers ideas of organization and labor conditions de- 
veloped in the West. The western business man, with his new meth- 
ods and his new commodities, and the western missionary, with his 
new conceptions of the value and rights of the individual, pene- 
trating into the uttermost corners of the land, have contributed 
their share toward breaking up the crust of custom. The Chinese 
who have gone abroad to study or to work have come back with 
their contribution of new thoughts and attitudes. In every field of 
Chinese life, the leaven is working. 

Protest and Reconstruction. 

The most conspicuous expressions of a newly awakening na- 
tional public opinion, especially as younger men, mostly students, 
have taken a prominent part in its formation, naturally run in the 
ancient molds of protest protest against excesses at home, 
against foreign aggression and foreign privileges, "Down with 


the Manchus," "Down with the Militarists," "Down with Foreign 
Imperialism," "Down with the Unequal Treaties," "Down with 
the dirty gentry and politicians." Other and newer voices protest 
against the ancient restrictions on individual freedom: "Down 
with the Conservatives," "Down with Communism," "Down with 
the old marriage customs" even, in the case of one parade, 
"Down with Downing" these are the confusing cries of an ado- 
lescent democracy which resound in the market places even while 
the beginnings of rebuilding are going on in the shops, the homes, 
and the schools. A new order must contend with, manage, or sub- 
due if it can this normal impulse to extremes and shouting when a 
new vigor begins to fill the life of a nation, expressing itself in tur- 
moil, hubbub, and disaffection whose undirected tendency is to 
make chips and splinters rather than hewn timbers. 

Not all of those seeking to modernize China, however, are let- 
ting their impatience with old ways turn them to destruction only. 
Not a little of the reviving energy has gone into solid building. 
Modern banks, for example, have been organized and the bankers 
are finding their way to sound practices. Modern industry is be- 
ginning to get on its feet. Transportation facilities throughout 
the country are being materially improved by the establishment 
of motor bus services which build and use new roads. Schools, edu- 
cational technique, and subject matter are being experimented 
with and reorganized to bring them more into line with modern 

Uneven Penetration. 

The overcoming of the inertia of hundreds of millions requires 
more than Nationalist enthusiasm and decrees, and more than the 
work of comparatively few people over a few years. Laws on pa- 
per may nominally emancipate women and grant political equality 
with men, bobbed hair may become the rage among the girls in 
schools, some here and there may choose husbands for themselves 
in defiance of family and tradition but the great mass of the 
Chinese women remain virtually untouched. Illiteracy, isolation, 
the bondage of ancient custom, and the daily and urgent necessity 
of working for each day's food shut off most of the men and 


women, even in 1930, from the new privileges. Ancient, medieval, 
and modern co-exist inharmoniously in China today. Almost any 
question regarding the amount of change in any one respect in 
the family system, governmental practices, economic life can be 
answered only after the group or locality discussed has first been 

The students, free from the responsibilities of the more mature 
and from the necessity of earning a living, are the vocal spearhead 
of the penetration of new ideas ; and their influence in China is ma- 
terially enhanced by the ancient respect for the scholar. Close be- 
hind them in insisting upon the adoption of the new come the "re- 
turned students" who have been abroad, the younger business men 
and politicians in the port cities, the educators who have felt the 
newer impulses, the few workers who have risen to leadership 
among their fellows. These are concentrated in a few educational 
or business centers, chiefly near the coast ; and even in those places 
their influence has not yet penetrated sufficiently into the thinking 
or the customs of the shopkeepers and peasants to bring about 
fundamental changes. In the more remote areas back from the 
river valleys, up in the mountains, in the less accessible provinces 
of Szechwan, Kweichow, Yunnan, or Kansu, changes have been 
slight. Village government for the most part is still in the hands 
of the village elders. Marriages are still arranged by middlemen. 
Women remain in the home, have little interest outside it, and no 
information of events beyond the village horizon ; the equality of 
the sexes and the emancipation of women are as unheard of as 
John Stuart Mill himself, and excite no interest. 

In the intermediate area, where trade and commerce and new 
ideas have gone, change has taken place in a mottled, irregular 
manner. New commodities are made and traded in ; new relations 
of the workers to one another and to their employers are develop- 
ing; new forms of association between the merchants are being 
established. In the medicine shops will be found the old drugs 
ginseng, ground deer's horn, wood-lice shells, monkeys' bones, and 
ground "dragons' teeth" prescribed and sold by the old-style 
physicians and their druggist associates; but the vaccination of 
children is making headway and attention is being paid to the 


purity of the water supplied for drinking. Among the students, 
of present and recent school generations, change is well-nigh com- 
plete so far as conscious mental attitude is concerned, even though 
the unconscious pullback of the old emotions, sympathies, and 
habits is still strong. 

In speculation on theories of government or their application, 
in enthusiasm for experiment and change, Young China is taking 
the lead. Many of the young people are dogmatic, as reformers 
know how to be. But these Young Chinese, pushing themselves and 
their ideas egregiously, the older generation is inclined to think 
into public life, into political, commercial, banking, industrial, 
and educational pursuits, are combining western training, secured 
in China or abroad, with accumulating experience in adapting 
their knowledge to the needs of the present China situation, and 
consciously and unconsciously are indoctrinating China with the 
new knowledge and attitude. They call upon other peoples and 
governments for prompt understanding and cooperation, for 
something better than that belated revision of policy which they 
derisively call "post mortem first-aid," and they sometimes become 
impatient when their demands are not heeded quickly. 

Confusion of Aim. 

The young men and women in the port cities and the educa- 
tional centers, while still only partially freed from the chrysalis 
of ancient tradition, repudiate the teachings of Confucius as im- 
posing an unnecessary bondage upon political and social thought 
and action ; those teachings, they say, have been one of the chief 
causes for the backwardness of China. Most of the young Chinese 
dream of complete freedom in choosing their wives or husbands 
and in selecting their own careers, and some are making those 
dreams come true. They oppose a monarchy although they are not 
satisfied with the present political regime; they believe in equal 
rights for men and women, and in the schools take coeducation as 
a matter of course. Few are adherents of the faiths of Buddhism 
or Taoism ; most see no need for religion of any sort. The majority 
are moved by a sincere desire to work for their country's better- 
ment, wish to see the lot of the common people improved, believe 


that China should be freed from the bondage of the "unequal 
treaties" so that it may belong fully to the Chinese and foreigners 
have no special privileges. All this and more is expressing itself in 
an emotional as well as intellectual reaction against everything 
that savors of shackles, whether inherited from the older China or 
introduced from the West. The youth of other nations during simi- 
lar periods of national readjustment have passed through similar 
stages ; it is not surprising that Young China suffers from the neu- 
roses of strain, from extravagancies of enthusiasm and fanaticism 
alternating with periods of discouragement. It is for the young a 
time of Sturm und Drang in which there is intense eagerness to 
discover the most direct path to immediate social and national re- 
construction and to achieve a fuller and more satisfactory per- 
sonal living. Confusion of aims and swift alteration, to the point 
of seeming instability, are among the inevitables of any revolu- 
tionary era. 

The intellectual formulations given to the new impulses in 
China have changed with developments. The leaders of the first 
attempt to change governmental forms who succeeded in getting 
their hands actually on the reins of power Liang Chi-chao and 
Rang Yu-wei who led in the preparation of the "reform edicts" 
of 1898 advocated constitutional monarchy with western-style 
democratic institutions, although Sun Yat-sen had already 
started his campaign for the complete overthrow of the Manchus 
and the establishment of a Republic. The Republic came in 1911, 
but the grip of the older officials, with Yuan Shih-kai at their 
head, kept things moving substantially in the old grooves, and not 
until 1916 and 1917 did the revival of spirit begin to sweep away 
the hopelessness which had overcome the younger men following 
the bursting of their dream bubbles by the realities of the situa- 
tion. Then the attack on the old began along new lines and with a 
broader understanding. It was realized by a few whose views have 
steadily spread that a change in the forms of government was not 
enough ; that the fundamental attitude of mind of the people must 
be altered. 

Thus Chen Tu-hsiu, a returned student from France, and his 
associates launched their magazine La Jeunesse in 1916 and 


opened the campaign against Confucianism, arguing that the 
teachings of the sage were essentially faulty because (1) filial 
piety involved the idea of a double ethical standard; (2) women 
were enslaved to their men-folk, and the emancipation of women is 
necessary. "Confucianism must be eliminated or China might just 
as well be under an autocratic government," said Chen. By the in- 
troduction of democracy and science, the leaders said, China can 
be saved and properly controlled. The old customs and ideas must 
be weighed critically, and theories from the West are to be exam- 
ined and introduced as they can contribute to China's needs. The 
problems which are to be investigated lie in the social, political, 
religious, and literary fields. 

Spreading Knowledge. 

Dr. Hu Shih, while a student in the United States in 1914-16, 
initiated steps toward the substitution of the colloquial spoken 
language for the ancient literary forms as the literary means ap- 
propriate to the modern day. After his return to China, he and 
others who thought along the same line launched a campaign of 
writing and speaking in favor of the use of "Pei Hua" or collo- 
quial, and to prove that it could be as acceptable a literary me- 
dium as the ancient language they proceeded to write poems, 
essays, and historical and critical works of high quality in the ver- 
nacular. Now most of the newspapers and magazines in China use 
Pei Hua instead of the old literary language, and recently, the 
Ministry of Education, headed by Chiang Mon-lin, formerly act- 
ing Chancellor of the National University at Peking, has put it- 
self behind the campaign for the use of Pei Hua in all writing ; it 
has ruled that this shall be taught instead of the old literary Chi- 
nese in all the primary schools, and it has succeeded in securing a 
formal government order that all official documents shall be in Pei 
Hua. The change is comparable to, though in some ways more 
significant than, that brought about by Chaucer in the use of col- 
loquial English as a literary medium instead of Latin. 

Along with this effort to bring the written and spoken lan- 
guages closer together by purely literary works has gone much 
translation from standard western books on philosophy, social 


questions, economics, politics, etc. The older Chinese classics, too, 
have been put into the colloquial. Recently as a step toward in- 
creasing the opportunities of the people throughout the country 
for contact with western as well as Chinese thought, the Commer- 
cial Press of Shanghai (an enterprise financed, managed, and 
staffed by Chinese which has developed into one of the great pub- 
lishing houses of the Far East) published a library of two thou- 
sand volumes of the world's masterpieces, all in Pei Hua. This 
monumental compilation brings to the Chinese, in the vernacular, 
the works of such western writers as Plato, Aristotle, Hume, Spi- 
noza, Descartes, Schopenhauer, Nietzsche, James, Dewey, Berg- 
son, Homer, Dante, Cervantes, Shakespeare, Milton, Moliere, 
Swift, Goethe, Schiller, Turgenieff, Tolstoy, Hugo, Hauptmann, 
and Shaw. One hundred volumes are devoted to the Chinese 
classics, one hundred to foreign literary masterpieces, eighty to 
history and geography, fifty to agriculture, thirty to medical sci- 
ence, thirty to mathematics, and thirty to an encyclopedia. The 
total set is sold for approximately $100 (gold) , so that a complete 
library can be bought by persons of moderate means. A number of 
provincial governments are buying sets for each county, and each 
ship of the Chinese navy is to have one. 

The desire to bring new opportunities to the common people 
found one significant expression in another movement, that for 
mass education which has been led by James Y. C. Yen. Mr. Yen 
and his associates, on the basis of studies of current newspapers, 
magazines, books, and other publications, grouped the Chinese 
characters in the order of frequence of use. They found that ap- 
proximately one thousand were used much more often than the 
rest, and that these thousand were enough to provide means of 
written communication for ordinary needs. They prepared four 
simple "readers" (which have been revised from time to time) for 
teaching these thousand characters, and worked out teaching 
methods by which even untutored peasants and workmen could 
learn them by spending an hour a day for four months. The move- 
ment took hold quickly and has spread throughout the country. 
As a result well over two million men, women, and children who 
would otherwise have remained illiterate have learned to read. 



After the excursus of Chinese students to learn the ways of the 
West had become an established practice, the demand for change 
penetrated the Forbidden City, and in 1905 an edict was issued 
abolishing the old examination system and creating a Ministry of 
Education. The conception of education as existing solely to pre- 
serve the cultural heritage was giving way to the modern concep- 
tion of education which looked to the future of the individual and 
of society. The new plan of school organization provided for ele- 
mentary teaching of arithmetic, geography, history, elementary 
hygiene, etc., though the study of literary Chinese was retained. 
An ambitious program for higher education, general and techni- 
cal, was mapped out. 

By 1912 the new Republic was stressing educational changes in 
the direction of democracy, the enlargement of school facilities, 
the introduction of coeducation, and the elimination of the ancient 
classics. Ten years later the modern schools numbered some 180,- 
000 with more than 7,000,000 pupils, besides the 10,000 mission- 
ary schools with their 360,000 pupils, and the many private 
schools maintained by temples or families, and others concerning 
which no statistics are to be had. On the basis of textbooks sold, 
the editor of the Commercial Press estimated that in 1928 there 
were 12,000,000 pupils in modern schools out of 20,000,000 in the 
schools of all types. 

Meanwhile the development of higher education had gone for- 
ward. For many years the National University at Peking drew 
students from all parts of China and from Chinese communities 
all over the world, and on its faculty were the intellectual leaders 
of the country. Nan Kai, at Tientsin, starting as a small middle 
school in 1907, developed as a private institution until three years 
ago it had established a college department. A Chinese who had 
made millions in trade in the South Seas, nine years ago estab- 
lished a university in his home city of Amoy. Less striking schools, 
also under purely private Chinese control, have been founded in 
various centers. Governmental universities, higher normal schools, 
agricultural colleges, law colleges, and other special educational 
institutions were opened in Peking, Tientsin, Shanghai, Nanking, 


Hankow, Canton, Mukden, and other cities. Tsing Hua College, 
founded in 1911, continued to develop with the aid of American 
Boxer indemnity remissions. 

Side by side with these Chinese institutions, the various mission- 
ary organizations, individually or in cooperation, created and de- 
veloped colleges and universities, such as Yenching at Peking, 
Cheeloo at Tsinan, Shanghai Christian College, Nanking Univer- 
sity, Boone University at Hankow, and Canton Christian College 
(now Lingnan University). 

During these years, too, studies and experiments in educational 
methods and subject matter were being made. The Mass Educa- 
tion Movement tried to teach a necessary minimum of reading 
knowledge to the masses. The National Educational Association 
and related bodies studied how to have a uniform spoken language 
taught in the primary schools so that the whole country might 
have one dialect, and worked out a series of elementary textbooks 
which could be and in large measure were put into use throughout 
the country. The China Foundation for the Promotion of Educa- 
tion and Culture (financed with American Boxer indemnity re- 
missions) concentrated on improving the teaching of the natural 
sciences. Geological surveys and research institutes of various 
sorts undertook the task of a scientific study of China's resources 
and needs. 

The Nationalists, since they came into power, have continued 
the previous interest in education. They have promulgated laws 
requiring all schools to register with the Government, and provid- 
ing that to secure such registration the head of each school must 
be a Chinese (this was a move to bring the missionary schools 
within the scope of Chinese regulation ; having made the gesture, 
however, the Government has interfered very little with the actual 
administration of the missionary schools). For the higher state 
schools, the Government has been providing funds, not in large 
amounts but at least regularly so that some sort of planning has 
been possible. 

Educational facilities in China are still far from adequate. 
Even a liberal estimate gives not more than 5 per cent of the chil- 
dren in primary schools, and a pitifully small number in the sec- 


ondary schools and colleges. But a comparison with the situation 
ten years ago shows that progress has been made. 

Largely in connection with the schools, and at first chiefly in 
the missionary colleges, modern athletics have taken a strong hold 
in China. Elsewhere this would be noticeable only as an item of in- 
ternal interest ; in China it is a striking element in the process of 
westernization, representing a vital change from the old customs 
according to which anyone aspiring to the title of gentleman in- 
dulged as little as possible in physical exercise. From a small be- 
ginning some fifteen years ago, a national athletic federation has 
grown until its membership includes representatives from practi- 
cally all the colleges and universities, many non-school athletic 
clubs of various sorts, and some army groups. Under its auspices 
athletic meets drawing competitors from all parts of the country 
are held every year ; the one at Mukden in 1929 had almost 2,000 
participants ; that at Hangchow in 1930 drew fully as many, and 
over 10,000 people turned out to watch events on the opening day, 
many coming from Shanghai and Nanking. China has partici- 
pated with fair success in the last two Far Eastern Olympics and 
a new spirit of sportsmanship and team cooperation is also being 


Industrial development, particularly in the principal port 
cities Shanghai, Hankow, Canton, and Tientsin has been par- 
alleled by agitation by laborers, not infrequently stirred up by 
students and other "intellectuals," for more wages, shorter hours, 
and better working conditions. Unions of various sorts have been 
formed, chiefly in the larger port cities. Most of these have been 
of the occupational sort, such as the railway men's union, the sea- 
men's union, the filature workers' union, and in spite of the intro- 
duction of certain new ideas as to forms of organization and pur- 
pose the tendency has been for these unions to develop along the 
lines of the old craft guilds in so far as they have achieved any 

Agitation and strikes by laborers were used by the Kuomintang 
leaders as a weapon in China's international relations at various 


times, particularly during the period of the Nationalist advance 
northward from 1925 to 1928. Prior to that, however, the great 
seamen's strike at Canton in 1923, which in origin and continua- 
tion was essentially a political attack on British interests at 
Hong-kong, had brought labor agitation into the political field. 
The Shanghai Incident of May 30, 1925, was followed by fur- 
ther agitation among and by the workers for political rather than 
economic purposes, and the labor troubles at Hankow, Shanghai, 
Peking, Tientsin, and along the railways in 192628 were partly 
the result of agitation by Kuomintang workers seeking to create 
difficulties for the anti-Nationalist authorities or to spread Com- 
munist propaganda. 

The workers apparently went into the strikes and demonstra- 
tions with the naive belief that they could ask anything they 
wanted in the way of wage increases and shorter hours, and the 
employers would meet their demands. The demands, however, in 
many cases were so exorbitant that shops and factories simply 
shut down, being unable to give what was asked, with the result 
that hundreds of thousands of workers who had been filled by 
Communist agitators with dreams of easy and luxurious living at 
the expense of the "capitalists" found themselves without any 
work. The disillusionment which followed was a sharp setback to 
the development of the labor movement, and also contributed not 
a little to the reaction against Russian influence in China. Strikes 
continued in 1928 and 1929, but the demands in the main were 
more reasonable and the motives behind the strikes more purely 
economic. The number and seriousness of the strikes also de- 
creased; Shanghai in 1927, for example, had 136 strikes with a 
total of 2,870,927 days lost, while in 1928 there were 114 strikes 
involving a loss of 1,445,062 working days. 15 

While the Nationalist party organization, the Kuomintang, 
worked with and helped develop the General Labor Union in 1925 
and 1926, when the break between the radicals and the moderates 
in the Nationalist ranks came after the Nanking Incident of 
March, 1927, the Nationalist government turned strongly against 
the Union chiefly because the Government was controlled by the 

is Report of the Municipal Council. 


moderates and the Union by the Communists. A clash occurred at 
Shanghai in April, 1927, in which government soldiers and police 
shot down many workers, and a policy of suppression of labor 
unions of all sorts was carried out for a time. This aroused some 
criticism, but was successful in putting an end to the efforts of the 
radicals to use labor agitation for political purposes, in part at 
least because the laborers themselves had lost confidence in such 
agitation as a means of improving their lot. 

With the further industrialization of China, however, the labor 
movement will continue to grow. In many cases the new industry is 
marked by appalling conditions involving long hours, women's 
and children's labor, low wages, barracking of laborers. The fac- 
tories, too, are breaking up the older family system and thus un- 
dermining one of the chief stabilizing elements in China. The 
older guilds also are dissolving. Serious efforts are being made, by 
those concerned over the inhumane conditions in many of the fac- 
tories, to help China through the period of industrialization with- 
out the catastrophic cost in human life and suffering which 
marked the beginning of the industrial system in the West. 


One of the directions in which the protest of Young China 
against traditions showed itself was in the development of a move- 
ment against religions of all sorts, which, beginning in 1922 and 
continuing for a year or two, took on a specifically anti-Christian 
character. Religion was called "an opiate to the mind," and the 
Christian missionaries were branded as the advance agents of for- 
eign imperialism. Some of the more philosophically minded, like 
Dr. Hu Shih, argued against this attack on religion as contrary 
to the spirit of philosophical toleration. Nevertheless, in 1922, 
1923, arid 1924 there were various attacks on Buddhist and Tao- 
ist temples as well as on Christian property, and considerable agi- 
tation by fiery youngsters in favor of "free thinking." 

The antireligion movement has now quieted down. But it has 
had several significant effects: it materially strengthened the 
hands of those in official and educational circles who wanted to 
see religious teaching removed from the category of compulsory 


subjects in the Christian missionary schools, for example, and en- 
abled them to carry the point that all schools must register with 
the Government and make religious training elective. The anti- 
religion movement also stirred to new life the leaders of the vari- 
ous religions; a vigorous movement for the modernization and 
purification of Buddhism was started; the Chinese Christians 
pushed forward the plans for a purely Chinese Christian church 
which would be independent of western denominational influence 
or financial support and for a restatement of the basic Christian 
doctrines in terms of Chinese life and thought ; the Conf ucianists 
and Taoists were also stirred to new activity, though their refor- 
mation movements have not become nearly so vigorous as those of 
the Buddhists. 


Among the influences of considerable weight in the period of the 
Nationalist advance northward from Canton to the Yangtze Val- 
ley was the Russian-inspired and organized radical element in the 
Nationalist ranks. Even before Sun Yat-sen turned to the Rus- 
sians in 1923 for the help they were ready to give in financing and 
organizing the revolutionary movement which he was leading 
help which he was ready to take not because he believed in Com- 
munism but because he was willing to use any assistance he could 
find in promoting his cause, help which the Russians were ready 
to give because they thought they could control the Nationalist 
organization a few of the intellectuals in China had announced 
their faith in Communism as offering the solution of China's prob- 
lems. Communism, however, did not become a vital factor until the 
Russians appeared on the scene. 

First through representatives of the temporary Far Eastern 
Republic of Siberia and then through men accredited directly from 
Moscow, the Russian Communist leaders had been seeking a foot- 
hold in China for the campaign of world revolution. They played 
both with the northern government at Peking and with Sun Yat- 
sen and the Kuomintang at Canton. Their agents assisted in the 
training of the Nationalist armies which started north from Can- 
ton under Chiang Kai-shek's command in 1925, and they fur- 


nished some of the arms and funds for that drive. Young Chinese 
trained by them in Communist propaganda methods and doctrines 
some working from honest conviction and others merely for 
money went in advance of the armies or along with them, 
spreading ideas of revolt against the established order. At the 
same time, Communist agents were securing and developing con- 
tacts with the students and workers in other parts of the country, 
particularly in the educational centers such as Peking and Shang- 
hai. To these young men and to the ignorant laborers, the prom- 
ises held out of a new heaven and a new earth were alluring. The 
Chinese Communist party, which prior to the time of its affiliation 
with the Kuomintang in 1924 had been a small debating society 
of intellectuals, increased enormously in membership and became 
the propagandist Left Wing of the Nationalist movement. The 
more conservative Nationalist leaders, however, after Sun Yat- 
sen's death in 1925, fell out of sympathy with the radicals. Each 
side, for its own advantage, avoided an open break until the Na- 
tionalist armies had reached Shanghai early in 1927. Then the 
radicals staged the Nanking incident of March 24 of that year, 
in which foreign consuls, missionaries, and business men and 
their properties were deliberately attacked by troops under con- 
trol. The purpose was clearly not to kill the foreigners only six 
all together were killed, although practically every one might have 
been massacred before protective steps could be taken but to 
provoke reprisals from the foreign warships at anchor in the 
river. Events and subsequent statements of those concerned made 
it clear that the affair was not antiforeign like the Boxer upris- 
ing of 1900; the foreigners in Nanking were simply pawns, being 
handled roughly in the expectation that the foreign governments 
would take vigorous reprisal measures which would bring about a 
wave of antiforeignism throughout the country on the crest of 
which the radicals could sweep into complete control of the Na- 
tionalist organization. The foreign armed and diplomatic agents 
were notably restrained ; the feeling of the country turned to bit- 
terness against those responsible for what was called a disgraceful 
blot on China's good name ; the position of the moderates was ma- 
terially strengthened; very soon thereafter relations with Russia 


were broken off and Russian consular and other officials were sent 
out of the country ; a vigorous campaign against Communism and 
radical agitation was launched in which several thousand of the 
young enthusiasts whose main fault had been too much zeal were 

The Communist party was suppressed and open Communist 
agitation stopped. Communism as an economic and political sys- 
tem for China has difficulty in making headway against the mass 
of small property holdings, the age-old necessity for every family 
or economic group holding fast to all possible means of obtaining 
a livelihood. The economic disturbances and agitation since the 
break with Russia, though frequently called "Communistic," have 
come in part from the causes that created the fourteenth-century 
Jacquerie and in part from the causes that brought on disturb- 
ances in England at the beginning of the Industrial Revolution. 
Yet in spite of the fact that disillusionment and fear have done 
much to check the outspokenness of Young China, radical revolu- 
tionary feeling is still strong, and there is also much dissatisfac- 
tion of a purely Chinese character with military and dictatorial 
methods foreign to the Chinese philosophy of personal and social 
conduct, with dilatoriness in ushering in the new political and eco- 
nomic era, and with the failure to eliminate intrigue and corrup- 
tion from the Government. 

The Students. 

Young China in school the students in the colleges and to a 
certain extent in the secondary schools has played a large part 
in giving vocal formulation to protests, and in supplying enthusi- 
asm to the revolutionary movement. Students by thousands 
flocked to the Republican banners in 1911 and 1912, and most of 
the leaders now prominent were among those who had one sort of 
share or another in the skirmishing in the military and political 
arenas at that time. In 1919 the students, inspired and advised by 
not a few of their teachers, headed the agitation which kept China 
from signing the Versailles Peace Treaty because of its accept- 
ance of Japanese control of Shantung, and forced the Cabinet at 


Peking to dismiss three of the notoriously pro-Japanese ministers. 
Students figured prominently in the May 30 incident of 1925 
in Shanghai and in the agitation which followed ; they started the 
anti- Japanese boycott of 1927-28 and kept it going as long as it 
was a really effective movement; thousands of them left their 
schools to join the Nationalist armies during the drive northward. 
For several years political developments and the part they, as stu- 
dents, might play in ushering in the new era for China absorbed 
far more of the attention of many of the young men and women 
than did their studies. In the last year or two, much of this stu- 
dent activity in the political field, and much of the agitation in the 
schools, has died down. Even though the enthusiasm of the young 
people was inadequately tempered by experience, and many 
things were done which the students themselves later recognized 
were harmful or foolish, the "student movement" showed that 
China possesses in its young people a reservoir of reconstructive 

Political Evolution. 

In the more specifically political field, the desire to modernize 
China, which first came to the surface in 1898, has been groping 
its way forward toward coherence and realism. The 1898 re- 
formers, young men with little practical experience working 
through a young emperor who had just come to the throne, sought 
to remake China overnight by a series of edicts, which, however 
sound in theory, ignored the antiquity and sluggishness of China's 
social and political organization. They failed because they tried 
to do too much too suddenly. 

Sun Yat-sen and his associates in 191112 thought that politi- 
cal and social regeneration could be secured at a stroke by adopt- 
ing a form of government modeled on the youngest of the western 
republics, France. Although the Empire was overthrown, and the 
governmental system became nominally republican, the essentials 
of the old system remained. When the time came for setting up a 
new government after the Nationalist armies had taken Peking in 
June, 1928, the men who were then leading the Nationalist or- 


ganization were more politically experienced. Seeing that China 
was not ready for democracy and impressed with the success of 
Sovietism and Fascism, they set up a dictatorship for a "period of 

The Kuomintang or Nationalist party, a continuation of the 
revolutionary group that had centered around Sun Yat-sen's ef- 
forts for the overthrow of the Manchus, assumed this dictator- 
ship. The party which had undergone several reorganizations in 
1924, took on, under the influence of the Russians during the 
Canton sessions of the National Kuomintang Congress, substan- 
tially its present form which is modeled partly on the Soviet sys- 
tem and partly on the old Chinese guild system and the practice 
of committee rule in guild and village. In October, 1928, the Cen- 
tral Executive committee of the Kuomintang announced the Or- 
ganic Law of the Nationalist government, giving control of the 
administrative, legislative, and judicial machinery to a State 
Council under which were five "Yuan" or departments execu- 
tive, legislative, judicial, examination (in substance a civil service 
board), and control (an auditing and general supervisory board). 
The Chairman of the State Council was made commander-in-chief 
of the armed forces and head of the State for diplomatic pur- 
poses. Acts of the State Council or of any of its subordinate offi- 
cers or its officials were to be subject to review by the Central 
Executive Committee of the National Congress of the Kuomin- 

This compromise between those who wanted centralized and ef- 
ficient power and decentralization suitable to the area of the coun- 
try, the lack of communications, and the variety of differing inter- 
ests, was an acceptance of the fact that China was unready for 
democracy. No provision was made for the election of officers by 
any vote except that of the Central Executive Committee of the 
Kuomintang, nor was any term of years specified for holding of- 
fice. The end of the "period of tutelage" was set for 1935, on the 
assumption that the people would then be sufficiently familiar with 
self-government to exercise a substantial measure of political con- 
trol. Meanwhile the Government remains a dictatorship by the 


The Kuomintang. 

The ultimate control of the Kuomintang rests in theory with 
the individual members. Kuomintang branches, established in the 
principal cities and in some of the county seats, focus, according 
to the paper organization, in the provincial organizations, and 
these in turn in the Central Executive Committee; at Nanking 
this last has a Standing Committee which is supposed to be in 
more or less constant session. The rules prescribe a biennial Na- 
tional Congress of the Kuomintang, composed of delegations from 
the branch organizations whose duty it is to elect the Central 
Executive Committee, review actions during the previous two 
years, and lay down general policies for the next period. The 
Fourth Congress was held in March, 1930. 

In practice the control of the Kuomintang has lain with a small 
group of men who have dominated the Central Executive Commit- 
tee and through that the Congresses. Most of the active members 
of the Central Executive Committee of the Kuomintang, too, are 
members of the State Council or its subordinate agencies, so that 
while Party and Government are separate in theory, the directo- 
rates are interlocking and the distinction is more nominal than 

In the last few years the activities of many Kuomintang mem- 
bers in the small branches and in some of the provincial organiza- 
tions have caused an observer who is in close touch with political 
developments in China to say : 

Everywhere Chinese much more than foreigners have suffered from 
the tyranny of the "Tang Pu" (Kuomintang District Party Head- 
quarters). It is not the big men of the Kuomintang who are respon- 
sible for the difficulties which beset the people, it is these little party 
representatives, these very small people, who seem to be making a 
good thing out of party activities. 10 

The irritation thus aroused in many parts of the country has im- 
paired the general standing of the party, and has contributed to 
an increasing dissatisfaction with the Nanking administration, 

iQ China Year Book (1929-30). 


which has not yet been overtaken by the counter-efforts of the 
party leaders. 

Out of Medievalism. 

In these and many other ways social, educational, economic, 
political China is trying to modernize itself. Only a small part 
of the people has been so touched by the newer impulses, which 
were planted from the West and are beginning to find root in 
China, as to feel any personal responsibility for taking a share in 
the work of readjustment. No clear vision of the problem and of 
the part which reconstruction in each field should play in the re- 
making of the whole has yet been developed. The country is huge 
and ancient and disorganized, without traditions of unity in terms 
of the nation as a whole, with utterly inadequate communications, 
and a staggering load of illiteracy, poverty, and isolation-bred 
conservatism. Against these things let it be remembered that the 
modern West has spent five hundred years in lifting itself from a 
level not unlike that of China a quarter of a century ago. China 
has the stimulus, the example, and the experience of the West as 
aid in working out its problems, but the process of passing from 
medievalism into a new type of order and stability is likely to re- 
quire years running into decades. 

In the main, the driving force and the leadership in the changes 
came until recent years from the West, through the missionaries 
and the business men who went to China and through the western 
schools attended by Chinese. Whatever the West may still furnish 
by way of example of what not to do as well as of what to do 
the Chinese themselves have now definitely taken in hand the task 
of rebuilding their country. The foreigner will have a place as as- 
sistant, as advisor, as trade intermediary, but will no longer hold 
the place of moral or financial or diplomatic authority which has 
been his in the past. For good or ill, the Chinese have taken charge 
of the modernizing of China. 


THE American press has neglected the Orient as a news center ; in 
fact much of the news about Far Eastern happenings used to 


come to the United States from Europe. With the growth of 
American political and economic activity abroad, this condition 
has changed to some extent, and there is a tendency in the metro- 
politan press at least to anticipate rather than to follow expansion 
of American interests. From an approximate total of 16,500 
words cabled from Japan and China in 1913 to the New York 
Times, the number increased to 96,471 in 1928, and 106,218 in 
1929 of which 65,891 were from China and 40,327 from Japan. 

But there is little prospect in the near future that the Far East 
will be brought as close to America's doors as Europe. For one 
thing the cost of sending messages shows a wide disparity. News 
of happenings in London can be sent to the United States for five 
cents a word ; the charge for dispatches from Japan is twenty-two 
cents a word, reduced to thirteen cents on a deferred press rate ; 
from Hong-kong, eighteen cents and from Shanghai, sixteen cents. 
As a result of these high charges dispatches from the Orient are 
bound to suffer even more from abbreviation than do those from 
Europe, and only the striking items of oriental news are trans- 
mitted social disasters and the repeated crises of eastern poli- 
tics. The same love of the sensational is played up to in domestic 
"news," but it is more serious in the case of foreign news, for the 
reader hears and knows less of the normal processes of gradual 
change. Informed comment by editorial and special writers may 
meet the situation, and in so far as the Far East is concerned the 
practice of sending newspaper commentators periodically on tour 
is increasing the possibilities of interpretation. Institutions have 
lately collaborated with the newspapers. In 1929, for instance, the 
Carnegie Endowment for Peace conducted a party of writers at- 
tached to the leading American newspapers throughout the coun- 
tries of the Far East where they were given facilities for absorb- 
ing the background of the new problems with which eastern 
peoples are now faced. These tendencies are helpful in removing 
the fog of misunderstanding which prevails in the United States 
in respect of China and its constantly fluctuating conditions. 

Helpful also in reducing misunderstanding are the growing 
number of conferences on eastern subjects in the United States, 
the international conferences of the nations bordering on the Pa- 


cific, the increasing study of the Far East in American colleges, 
and the coming of prominent Chinese to explain their own civiliza- 
tion in America. One of the first conferences on the Far East to 
be held in America was the meeting under the leadership of Pro- 
fessor Blakeslee at Clark University in 1909. In a series of later 
conferences, China and the Far East have frequently been dis- 
cussed by competent students of the Orient. The same subjects 
have often been treated by Chinese, Japanese, and Americans at 
the yearly conferences of the Institute of Politics at Williams- 
town, and more recently at Washington University, Seattle, at 
the University of Chicago, and at a conference held at Johns 
Hopkins University in 1929 by representatives of business, labor, 
civic associations, churches, missions, universities, and the press. 
The oldest of the associations calling together the delegates of the 
peoples living in the Pacific area was the Pan-Pacific Union, under 
the leadership of Alexander Hume Ford, an American living in 
Honolulu. The Union has held a number of conferences in Hono- 
lulu on various subjects ranging from the press to food resources 
and education. 

Institute of Pacific Relations. 

The Institute of Pacific Relations, composed of private citizens 
of most of the important countries bordering on the Pacific Ocean 
or concerned in the problems arising out of the contacts of that 
area, aims by research and by discussion to discover the facts 
relevant to those problems and to consider possible solutions or 
ameliorations for them. The first conference, held at Honolulu in 
July, 1925, considered issues involved in migration and immigra- 
tion, those growing out of international commercial and industrial 
relationships, and those created by religious, ethical, and cultural 
contacts. At the second conference, two years later, the main 
topics discussed were population and food supply in the Pacific 
area, Pacific mandates, international education and communica- 
tion, foreign missions and Pacific relations, industrialization and 
foreign investments, diplomatic relations in the Pacific area, and 
migration in the Pacific. The third conference was held in Kyoto, 
the ancient imperial city of Japan, in October and November, 


1929. There were delegations from Japan, the United States, 
China, Canada, England, Australia, New Zealand, and groups 
from the Philippines and from Korea. In addition there were ob- 
servers from the U. S. S. R., France, the Netherlands, Mexico, the 
Dutch East Indies, the League of Nations, and the International 
Labour Office. The subjects discussed were: 

1. The Machine Age and Traditional Culture. 

2. Food and Population in the Pacific. 

3. Industrialization in the Pacific countries. 

4*. China's Foreign Relations Extraterritoriality. 

5. China's Foreign Relations Concessions and Settlements. 

6. The Financial Reconstruction of China. 

7. The Problems of Manchuria. 

8. Diplomatic Relations in the Pacific. 

According to the custom of these conferences no votes were 
taken at Kyoto, no resolutions offered, but at the conclusion of the 
conference Chinese and Japanese delegates were considering the 
problems of Manchuria in an effort to harmonize Chinese political 
interests and Japanese economic interests in that region, and 
plans were under discussion for a rapprochement between the am- 
bitions of the Chinese Government to establish Chinese sovereignty 
over the foreign "settlements" and the responsibility of the 
Shanghai Municipal Council for the protection of the interests of 
the foreigners in that wealthy and well-administered munici- 

Increasing Study of Oriental Affairs. 

The curricula of a few American educational institutions show 
a developing interest in oriental affairs. 17 The Departments of 
Chinese at Columbia University and at the University of Cali- 
fornia are centers of oriental research. The Harvard-Yenching 
Institute of Chinese Studies, with branches at Peking and Cam- 
bridge, has the unique feature of a close organic connection be- 
tween a group of scholars, Chinese and American, studying in two 
countries China's past culture and present situation. The Page 
School of International Relations at Johns Hopkins University, 

17 See E. C. Carter, China and Japan in Our University Curricula (1929). 


and the Princeton School of Public and International Affairs, 
announced February 22, 1930, will both give attention to the con- 
temporary industrial, commercial, political, and diplomatic ques- 
tions of the Far East. 

Eastern and Western Culture. 

It is natural that there should be two schools of thought as to 
the relative "values" of eastern and western culture. Ku Hurig- 
ming, a brilliant advocate of the old ways in China, who studied 
with Carlyle in England and who voiced, up to the time of his re- 
cent death, the views of many conservative Chinese, believes that 
in the ancient eastern culture are social and personal values far 
higher than those offered by the West values which it would be 
lamentable to lose through the attrition of the more aggressive 
and less subtle civilization. Self-conquest is better than outward 
achievement; a love of simplicity is finer than a desire for com- 
plexity and variety; harmony by compromise and the mainte- 
nance of peaceful relations makes for happiness more than does the 
use of competitive force or a regulation of personal relations by 
rigid principles of law or legal combats. In the East, he says, 
there is an organic spiritual philosophy of nature which repre- 
sents love of nature, while in the West the attitude toward nature 
is one of naturalistic analysis, of the objective noting of fact, 
which is indifferent to the values that reflective absorption in 
nature arouses. Such observations are not confined to Orientals ; 
philosophically-minded westerners have often remarked that the 
common element of the East is the development of a profundity of 
soul as opposed to the restless mechanization and rationalization 
of life in the West. The Chinese Geist demands the creation of 
harmony between the external and the internal. The parable form 
of the idea describes a priest of the hills, whose life, though he 
fasted and lived only for the people around him, left him with a 
strange feeling of dissatisfaction. One day when he was sweeping 
the earth floor of his hut with his broom of willow withes, a bam- 
boo upright, struck by a pebble, gave forth a note of music, and 
this sound brought about the harmony between external and in- 
ternal which had hitherto been wanting for him. To this ideal of 


personal inner harmony corresponds an ideal of harmony in the 
organization of society. 

The leader of the Renaissance Movement, Dr. Hu Shih, on the 
other hand, does not scruple to ridicule the idea that the ancient 
culture of China in its present form is spiritual and that western 
civilization is materialistic. For him the people who are truly ma- 
terialistic are those who toil incessantly with their unaided hands, 
feet, and backs without being able to earn more than a bare sub- 
sistence, under masters who compel men to do the work of beasts. 
He declares boldly that "a civilization to be worthy of its name 
must be built upon the foundation of material progress," that 
"new civilization was given the religion of self-reliance as con- 
trasted with the religion of defeatism," and that by relieving hu- 
man energy from the unnecessary hardships of life and providing 
for it the necessary conditions for happiness, modern technology 
has produced spiritual results. Chinese culture cannot deal with 
the problems of poverty, disease, ignorance, and corruption. It is 
Dr. Hu's belief , based on the experience of Japan in strengthen- 
ing its indigenous culture with the new culture and the prosperity 
which the civilization of science and industry has made possible, 
that what is best and most valuable in Chinese culture will not be 
lost by the cross-fertilization of the old with the new. 18 

The realization of the vision lies, perhaps, far in the future, to 
be attained by the travail of increasing contacts, and an apprecia- 
tion of the fact that the community of needs and of interests de- 
mands cooperation instead of attrition and conflict. 

is January 24, 1930, Address, The Cultural Conflict in China, delivered before 
the American Association of University Women; The Week in China, February 8, 
1930, pp. 135-139. 



BY the summer of 1921 the international situation with refer- 
ence particularly to the Far East was such as to warrant, if 
not to demand, a conference of the Pacific and Far Eastern 
Powers. First, there was the Anglo-Japanese Alliance, which was 
to expire in July, and though the law officers of the British Crown 
advised that without specific renewal it would continue year by 
year until denounced, the new circumstances of the times made 
the consideration of renewal or abrogation by the contracting 
parties seem necessary. 

The Anglo- Japanese Alliance. 

The Alliance was made for the protection of India and Man- 
churia against the Russian advance. In the treaty of 1902 Japan 
sought freedom from interference in a war with Russia which it 
seemed to regard as inevitable. "If Japan had not secured an alli- 
ance with Great Britain, she would have sought, and probably ob- 
tained, an alliance with Germany" ;* Great Britain's naval forces 
were its best guarantor; Germany's military forces would be its 
second best. The revised treaty of August 12, 1905, insured 
Japan against a Russian war of reprisal and expedited the sign- 
ing of the Portsmouth peace treaty on September 5. 2 

The Anglo-Japanese Alliance was not intended to operate 
against the United States. In 1911, in view of the steady British 
orientation toward the United States, this provision was added in 
the third treaty : 

Should either high contracting* party conclude a treaty of general 
arbitration with a third power, it is agreed that nothing in this 
agreement shall entail upon such contracting party an obligation to 
go to war with the power with whom such treaty of arbitration is in 

1 Sir Frank Fox, The Mastery of the Pacifio, p. 231. 

2 See A. L. P. Dennis, The Anglo-Japanese Alliance, p. 23. 


The British intended that this clause should be implemented by an 
arbitration treaty between Great Britain and the United States, 
then in negotiation, but this failed of approval in the Senate. So 
anxious was the British Government to avoid making any alliance 
that might seem directed against the United States, however, that 
it notified Japan that it would regard the Anglo-American Peace 
Commission Treaty of 1914 as coming within the exemption 
clause. This was accepted by Japan, 3 and no objection was made 
in the United States. Subject to the interpretation, the 1911 revi- 
sion seemed to please all parties in England as well as the Domin- 
ions. This revision dropped out all mention of Korea, annexed by 
the Japanese in 1910, whose independence had been recognized by 
the treaty of 1902. 

But the disappearance of Russia in the World War as a mili- 
tary force left the Alliance without definite aim. As traditionally 
all such alliances have a definite aim, speculation naturally put 
next among the objectives the country with which Japan at the 
moment seemed most likely to become embroiled, i.e., the United 
States. The reasoning was unsound but of the popular type. 

The British began to feel uneasy. The revision of 1905 re- 
quired either country to come to the aid of the other whenever 
attacked by a single Power, and opinion became general in Great 
Britain and the Dominions that because of India and of Eu- 
ropean complications free Britain had tied itself to a militarist 
Power and was abetting that Power's imperialistic ambitions. 
The Twenty-one Demands on China were made when the British 
Empire was fighting for its existence and in disregard of the 
spirit of the Treaty; another cause of disquiet was that at the 
same time Japan was trying to keep China from entering the 
World War. "Japan," said Ishii, "could not view without appre- 
hension the moral awakening of 400,000,000 Chinese which would 
result from their entering the war." 4 

This Japanese militarism also earned suspicion on the part of 
both Great Britain and the United States because of the ambi- 
tions which it manifested during the joint expedition 5 in Siberia. 

s Ibid., p. 60. 

4 Edward T. Williams, China Yesterday and Today (4th ed.), p. 595. 

6 See pp. 60-63. 


It was realized that no power existed in Japan short of an over- 
whelming expression of public opinion to restrain the army and 
the navy because those services were not responsible either to Par- 
liament or Cabinet. The formation of public opinion against mili- 
tarism was checked by propaganda to the effect that vigorous and 
prompt measures by Japan were necessary to forestall American 
and British economic activity in Manchuria. The effect of the Al- 
liance on the United States, and British reflection on the position 
into which the British Government might be brought vis-a-vis the 
United States, even though the exemption clause in the Treaty 
might avoid the necessity of redeeming the Alliance in the direct 
military sense, increased therefore the British feeling of discom- 

Besides, the Alliance was becoming unbalanced as most al- 
liances do. The risks resting on Great Britain were far greater 
than those on Japan. Great Britain, in fear of injuring Japanese 
susceptibilities, found increasing awkwardness in not being able 
to range itself with the United States on issues of the Pacific. 
Dominion Prime Ministers Hughes, Massey, and Meighen 
and leading Dominion journals, no friends of rapprochement with 
Orientals (on account of immigration policies), inveighed against 
a renewal of the Alliance. British liberals joined in the agitation, 
though for a different reason. General Smuts said at the Imperial 
Conference of 1921 in London: "To my mind it seems clear that 
the only path of safety for the British Empire is a path on which 
she can walk together with America." Moreover, the belief gained 
ground that the Covenant of the League gave Great Britain all 
the protection which had been afforded by the Alliance. The Alli- 
ance had obviously lived out its destiny, and 

no alliance can stand motionless. To live and to remain effective it 
must march with events and be quick to catch new currents of air in 
international life and thought. 6 

This Alliance, then, and the nexus of designs which had clus- 
tered around it, along with the offensive-defensive problems of the 
western Pacific fortifications and naval bases which threatened 

Dennis, op. cit., p. 97. 


Japanese or Philippine security, the relations of Great Britain at 
Singapore and Hong-kong and of Australia and New Zealand to 
the United States and Japan respectively, Japanese aims in 
China and in particular in Manchuria these were the issues 
much more than limitation of naval armaments that needed liqui- 
dation and that produced the Washington Conference. Indeed, as 
has been pointed out again and again, the limitation of arma- 
ments achieved by the Conference became possible only as a result 
of political agreements which reduced the apprehension of dan- 
ger and persuaded the respective nations that their primary aim 
of national security could be obtained by agreement and might 
even be endangered by competition in the building of fleets and 

The informal inquiry addressed to the principal Pacific Powers 
went as far as international etiquette would permit in bringing 
these questions, which involved the alliance of two friendly Powers, 
before the Conference. The position of Japan, receiving this invi- 
tation, was therefore manifestly difficult. It was a new great Power, 
inexperienced and subject to suspicion. It was vitally interested 
in the area where grave problems of the future are to be settled, 
much more so than the United States and Great Britain. The 
rapid contraction of the world and the arrival in the Far East of 
the occidental countries with their developed ideas of precise 
boundaries and inclusion of nationals within those boundaries had 
put an end to that ebb and flow of races in the Far East which had 
given an outlet to the superior, i.e., the most powerful, civilization 
with an expanding population, and which had been the basis of 
eastern development from time immemorial. Japan was being ma- 
neuvered into a position where it would have to give up its gran- 
diose ambition to acquire at once or bit by bit a hegemony over 
China, a course which the other countries obviously disapproved. 
And it could take no risks, for a struggle which would be only a 
disturbing episode to the United States would mean life or death 
to Japan. 

Fortifications and Naval Bases. 

Among Far Eastern and Pacific problems were the fortifications 


and naval bases of the Powers in the western Pacific. The Powers 
chiefly involved were the United States and Japan, the naval au- 
thorities of the United States being engaged in delivering at 
Cavite an average of one submarine and one naval airplane a 
month, not to speak of the fortification of approaches and land de- 
fenses, while Japan was fortifying the Bonins and making naval 
preparations on other islands. If Japan were to be deprived of the 
protection of the Anglo-Japanese Alliance in aid of better rela- 
tions between the United States and Great Britain, the United 
States should logically in its turn stop loading guns only 750 
miles from Formosa, and in Japanese eyes pointed directly at the 
heart of Japan, while reciprocally Japan should not fortify its 
insular possessions, not composing Japan proper, and Great Brit- 
ain should not repeat in the Pacific area the fortifications which 
it was preparing at Singapore on a formidable scale. 

Accordingly the United States, Great Britain, and Japan in 
Article XIX of the Naval Treaty (February 6, 1922) 7 agreed 
upon the maintenance of the status quo with regard to fortific&- 
tions and naval bases in the following territories and possessions : 
As to the United States: "The insular possessions which the 
United States now holds or may hereafter acquire in the Pacific 
Ocean, except those adjacent to the coast of the United States, 
Alaska and the Canal Zone. 55 The Hawaiian Islands (Pearl Har- 
bor) are explicitly excluded from the Treaty and the Aleutian Is- 
lands are explicitly included. As to Great Britain : Hong-kong and 
the British insular possessions in the Pacific east- of the meridian 
of 110 east longitude, except the islands adjacent to Canada, 
Australia, and New Zealand; Australia, for example, thinks it 
may wish to fortify Papuan Bay on the south shore of New 
Guinea. As to Japan: The Kurile, Bonin, Liuchiu, and Pesca- 
dores islands, Formosa, and Amami-Oshima, "and any insular ter- 
ritory or possessions in the Pacific Ocean which Japan may here- 
after acquire. 558 

Article XIX of the Naval Treaty is the link between limitation 

7 See Survey, 1928, pp. 526-533. 

s The Pacific islands held by Japan under mandate were not included, their 
fortification being forbidden by the terms of the mandate; but the United States, 


of armament and the effort at security undertaken in the Four 
Power Treaty signed at Washington, December 13, 1921. The 
latter Treaty, like Article XIX of the Naval Treaty, was a sort 
of substitute for the Anglo-Japanese Alliance, affording Japan 
in Articles II and III some of the feeling of security which, at the 
price of alarming and irritating the United States, it derived 
from the positive assurance of the Anglo- Japanese Alliance. 

The Treaty Relating to Island Possessions. 

Mr. Balfour, doubtless chosen to break the news of the British 
intention because he had played a leading role in the negotiation 
of the Alliance in 1902, gave Secretary Hughes a tentative sugges- 
tion of the triple or quadruple entente and informed the Japanese 
that he had done so. The negotiations proceeded rapidly, conclud- 
ing on December 10, 1921, \tfith a treaty between the United 
States, the British Empire, France, and Japan which was signed 
on December 13, 1921. The Treaty binds the parties to respect each 
other's "rights in relation to their insular possessions and insular 
dominions in the region of the Pacific Ocean," to go into confer- 
ence for consideration and adjustment of any controversy between 
them "arising out of any Pacific question and involving their said 
rights which is not satisfactorily settled by diplomacy"; and to 
"communicate with one another fully and frankly in order to ar- 
rive at an understanding as to the most efficient measures to be 
taken, jointly or separately, to meet the . . . situation" created 
by the threat of aggressive action of any other Power. The 
Treaty runs for ten years from the time it shall take effect, and 
continues thereafter unless terminated by one of the High Con- 
tracting Parties upon twelve months' notice, and by its own terms 
brought to an end the alliance of 1911 between Great Britain and 

The Treaty does not include any islands and insular posses- 
sions except those of the contracting Powers ; the Netherlands and 
Portugal, Powers holding insular possessions in the region of the 

not putting its trust in the mandate system as to which it has no share of control, 
obtained Japan's direct agreement to their non-fortification in the Japanese- 
American treaty of February 11, 1922. 


Pacific Ocean, were thus not included, on the theory that the co- 
operation of Powers of their class would not be essential in pre- 
serving the peace of the Pacific. Nevertheless on the tactful ex- 
pression of their desire for recognition of their interests in 
connection with the treaty, the signatory Powers addressed identic 
notes to each of them declaring a firm resolve "to respect the 
rights" of Portugal and of the Netherlands "in relation to their 
insular possessions in the region of the Pacific Ocean." 9 The 
Power signing the note limits itself to an undertaking to respect 
the insular possessions of the Netherlands and of Portugal. 
Neither of these Powers is included in the undertakings to confer 
or to communicate, and on their part they give no reciprocal un- 

After the signing of the Treaty President Harding on Decem- 
ber 20 publicly expressed the opinion that the homeland of Japan 
was not intended to come within the expression "insular posses- 
sions and insular dominions." In this he was in error, all the dele- 
gates understanding that Hondu 10 and Hokkaido and the other 
home islands were included, and he made a public correction of his 
first statement; but the correction served only to emphasize a 
point that created immediate embarrassment for the American 
Government. The implication of Article II of the Treaty looking 
to "an understanding as to the most efficient measures to be taken, 
jointly or separately, to meet the exigencies of the particular situa- 
tion" created "by the aggressive action of any other Power" is 
that of some sort of activity of a defensive character in aid of a 
Power whose rights are so threatened. If this implication covered 
not merely Japan's outlying island possessions but the whole of 
Nippon, then the agreement might be taken by the Japanese as 
an Anglo-American guaranty for the whole of the Japanese ter- 
ritory in any war in which Japan might be engaged. Japanese 
militarists might then feel that they had everything to gain by 
imperialism in Asia, and nothing to lose if they held such a guar- 
anty against a counter-attack on their home territory. It is true 
that, applied only to Saghalin, Formosa, and the Pescadores, the 

Senate Document No. 128, 67th Cong. 2d Sess., pp. 922-923. 
1 Or Honshu, the main island of Japan. 


Anglo-American obligation to defend (if it were that) would give 
Japan a considerable protection against the reprisal consequences 
of any aggression on the Asiatic mainland, but such an Anglo- 
American obligation would have a much narrower scope and 
would seem no more than naturally reciprocal of Japan's under- 
taking with regard to Hong-kong and the Philippines. On the 
Japanese side, in view of the peculiar strategic conditions of the 
Japanese islands and of their highly advantageous situation for 
defense by mine and submarine, the home island could be defended 
by Japanese resources alone against attack by even the greatest 
Powers, and no guaranty was essential. Accordingly, on direct 
instructions from their Government, and on the score that such a 
guaranty might not be agreeable to Japanese pride, the Japanese 
delegates negotiated a supplementary treaty limiting the area of 
Japanese possessions affected by the Four Power Treaty to 
"Karafuto (or the southern portion of the island of Saghalin), 
Formosa and the Pescadores, and the islands under the mandate 
of Japan." 11 

The Senate felt qualms about the Treaty, even as thus reduced, 
and even though it fell somewhat short of a conventional alliance. 
As among the contracting Powers there is no guaranty, nothing 
but a fairly clear obligation to come into conference in the hope 
of an "adjustment" of an existing controversy. But Article II, to 
which reference has been made, carries a fairly clear implication 
that measures must be adopted by the signatories and then exe- 
cuted the word is "taken" by them in the case of aggressive 
action by any other Power, and this, it might be plausibly argued, 
means military and naval defense. Here might be the implication 
of an alliance limited to specific objects, and against such an im- 
plication the Senate, which under political conditions less auspi- 
cious to the Treaty might have defeated it altogether, was on its 
guard ; in approving the Treaty it attached on March 24, 1922, 
Senator Brandegee's reservation to the effect that "the United 
States understands that under the statement in the preamble or 
under the terms of this Treaty there is no commitment to armed 

11 For a comprehensive account of this whole episode, see Raymond Leslie 
Buell, The Washington Conference, pp. 181-199. 


force, no alliance, no obligation to join in any defence." By a 
simultaneous declaration of all four Powers the Treaty was de- 
clared applicable to the islands under Japanese mandate, with the 
proviso that the making of the Treaty should not be taken as an 
American assent to the mandates or preclude agreements by the 
United States with the respective mandatory Powers relating to 
the mandated islands. 

The Four Power Treaty seems to guarantee the status quo of 
the Pacific islands controlled by the signatory Powers. It has no 
application to any of the rights or interests of any of the parties 
on the Asiatic mainland, and puts no brake on acts that any of 
them may commit in any struggle there. 12 Yet by the cooperative 
precedent which it sets and by the direct suggestion of conference 
as a way of avoiding serious difficulties it has exercised a benign 
influence on the relations of the United States and Japan, none 
the less potent because intangible, and perhaps even the more 

During the sittings of the Washington Conference the United 
States and Japan brought to a halcyon end their teapot dispute 
over the island of Yap. Modifying the allied agreement of 1917 
that Japan should possess the German islands north of the equa- 
tor, the Supreme Council of the Peace Conference decided on May 
7, 1919, that Japan should have a Class C Mandate over these is- 
lands. On December 17, 1920, the Council of the League con- 
firmed the Japanese mandate. The American Government subse- 
quently contended that President Wilson, when consenting to this 
mandate in general, had stated that on account of the importance 
of Yap as a cable station he wished its final disposition reserved 
for future consideration ; he had hoped that it might be interna- 
tionalized, and he contended that the Supreme Council had not 
intended to cover it by the decision of May 7. Japan, whose dele- 
gates had not been present at the meetings of the Peace Confer- 

12 Mr. Buell, op. cit., p. 194, in 1922 suggested the interesting paradox that in 
the event of Japanese aggression in China or Siberia which would require China or 
Russia to declare war on Japan and to attack the Japanese islands, the United 
States, even if not obliged to bring military aid to Japan, would at least have to 
protest "to China for attacking Japan where we should be protesting to Japan 
for its aggressions in China or Siberia." 


ence when Yap was discussed, rested upon the record which made 
no exception of Yap from the mandate. A conference of the Al- 
lied and Associated Powers was held at Washington in the fall of 
1920 to make decisions about the former German cable lines, but 
the question of Yap was not solved; in February, 1921, Japan 
offered to extend to the United States, although not a member of 
the League, the enjoyment in the Japanese mandated territory of 
whatever rights and privileges were possessed by member states 
of the League. 

The Washington Conference afforded a favorable opportunity 
for continuing the pourparlers and a treaty between the two coun- 
tries was negotiated. 18 By Article III American citizens are to 
have free access to Yap on equal terms with Japanese in all that 
relates to the use of the Yap-Guam cable or of any cable touching 
at the island which may hereafter be laid by the United States or 
its nationals, and other provisions of the treaty secure equivalent 
or adequate protection for American interests in respect of radio- 
telegraph communication. The most important of the detailed 
provisions is that nationals of the United States are to be exempt 
from censorship or supervision over cable and radio dispatches, 
from taxes on messages or on cable or radio stations and from dis- 
criminatory police regulations. The trifling character of this dis- 
pute might not be so apparent in retrospect if it had not been 
sensibly ended without mortification to either of the disputants. 

China at the Conference. 

The report of the American delegates to President Harding at 
the close of the Washington Conference drew attention to the 
"causes of misunderstanding and sources of controversy" with re- 
gard to the Far East centering principally about China, "where 
the developments of the past quarter of a century had produced a 
situation in which international rivalries, jealousies, distrust, and 
antagonism were fostered." 14 Apart from the Anglo- Japanese Al- 
liance, it was the nexus of these rivalries which had generated the 

is For the general provisions of this treaty, see p. 312. Here only so much as 
relates to Yap is given. 

14 Senate Document, No. 126, 67th Cong., 2d Sess., p. 819. 


Conference. Reduced in intensity by the adoption of the open 
door policy, the diversion of the war, the extrusion of Germany 
from the Far Eastern field, and the inability of the Allied Powers, 
save Japan, in their depleted state to press forward vigorously 
their trading and other economic interests, the problem had never- 
theless taken a new turn with the demand of all the energetic ele- 
ments in Chinese political life for an end to the obligations which 
China had in some instances accepted even invited. In some cases 
these had grown naturally out of the evolution of circumstances, 
and in others had been imposed on it in moments of weakness and 
need. At Paris in 1919 it had laid its petition before the Peace 
Conference, to be turned away empty-handed by the Powers 
which already had on the council table more difficulties than they 
could resolve. China, affronted, refused to sign the Versailles 
Treaty, and made its peace with Germany as best it could by the 
Sino-German agreement of May 20, 1921. 

In the two-year interval between 'the two conferences none of 
China's warring groups would yield to any other in zeal for the 
ending of the foreigners' privileges, and although the composite 
Chinese delegation at Washington could have agreed at few 
points on the domestic problems of China it had no difficulty in 
uniting on the program of relief which the Chinese desired from 
"foreign domination." On November 16, the senior Chinese dele- 
gate presented to the Committee of the Whole the following pro- 
gram or Bill of Rights, with a request that it be adopted by the 
Conference : 

1. (a) The powers engage to respect and observe the territorial 
integrity and political and administrative independence of the Chi- 
nese republic, (b) China upon her part is prepared to give an under- 
taking not to alienate or lease any portion of her territory or littoral 
to any power. 

2. China, being in full accord with the principle of the so-called 
open door or equal opportunity for the commerce and industry of all 
the nations having treaty relations with China, is prepared to accept 
and apply it in all parts of the Chinese republic without exception. 

3. With a view to strengthening mutual confidence and maintain- 
ing peace in the Pacific and the Far East, the powers agree not to 
conclude between themselves any treaty or agreement directly affect- 


ing China or the general peace in these regions without previously 
notifying China and giving to her an opportunity to participate. 

4. All special rights, privileges, immunities, or commitments, 
whatever their character or contractual basis, claimed by any of the 
powers in or relating to China are to be declared, and all such or fu- 
ture claims not so made known are to be deemed null and void. The 
rights, privileges, immunities, and commitments now known or to be 
declared are to be examined with a view to determining their scope 
and validity and, if valid, to harmonizing them with one another and 
with the principles declared by this conference. 

5. Immediately, or as soon as circumstances will permit, existing 
limitations upon China's political, jurisdictional, and administrative 
freedom of action are to be removed. 

6. Reasonable, definite terms of duration are to be attached to 
China's present commitments, which are without time limits. 

7. In the interpretation of instruments granting special rights or 
privileges, the well-established principle of construction that such 
grants shall be strictly construed in favor of the grantors is to be 

8. China's rights as a neutral are to be fully respected in future 
wars to which she is not a party. 

9. Provision is to be made for the peaceful settlement of interna- 
tional disputes in the Pacific and the Far East. 

10. Provision is to be made for future conferences to be held from 
time to time for the discussion of international questions relative to 
the Pacific and the Far East, as a basis for determination of common 
policies of the signatory powers in relation thereto. 15 

To these aspirations, which most nearly touched the position of 
Japan of all the foreign Powers, the Japanese answer was cau- 
tious and friendly: it adhered to "the principle of the so-called 
open door or equal opportunity," it claimed no special rights or 
privileges, though its own economic welfare depended upon a free 
flow of raw materials and foodstuffs from China, it would join the 
other nations in the effort to come to an agreement with China on 
the latter 's demand for the abolition of extraterritoriality, and it 
had no desire for territorial aggrandizement at the expense of 
China. The caution of Japan in regard to so far-reaching a pro- 
gram was shared by the other delegations, and after assurances of 

is Senate Document, No. 126, 67th Cong., 2d Sess., p. 444. 


their sympathy for China and hope for its unity and welfare, the 
Conference adopted a set of conservative resolutions, drafted by 
Mr. Root, which fell short of satisfying Chinese ardors : 16 

(1) To respect the sovereignty, the independence, and the terri- 
torial and administrative integrity of China. 

(2) To provide the fullest and most unembarrassed opportunity 
to China to develop and maintain for herself an effective and stable 

(3) To use their influence for the purpose of effectually establish- 
ing and maintaining the principle of equal opportunity for the com- 
merce and industry of all nations throughout the territory of China. 

(4) To refrain from taking advantage of the present conditions 
in order to seek special rights or privileges which would abridge the 
rights of the subjects or citizens of friendly states and from coun- 
tenancing action inimical to the security of such states. 17 

The Open Door. 18 

The policy of the open door, supported by the desire of Great 
Britain and the United States to obtain full portions of the trade 
of China, has also behind it something of the Anglo-Saxon phi- 
losophy of "sportsmanship," that all should start from scratch in 
an open race, in the sense that artificial or governmental restric- 
tions on opportunity should be avoided. The Hay notes of 1899, 
conditionally accepted by the Powers, were limited to the prin- 
ciples of non-interference by any Power possessing a "sphere of 
interest" in China with any treaty port or vested interest within 
that sphere, the application of the Chinese treaty tariff within 
any such "sphere of interest," and uniformity of harbor dues and 
railroad charges. The broader principle of the note of July 3, 
1900, expressing the desire of the United States to 

preserve Chinese territorial and administrative entity, protect all 
rights guaranteed to friendly powers by treaty and international 

is For the treatment at Washington of some of the more definite of the Chinese 
desires which became the subject of continued action, such as tariff autonomy and 
the abolition of extraterritoriality, see pp. 131 ff. 

17 Senate Document, No. 126, 67th Cong., 2d Sess., pp. 459-460. 

is The genesis of this policy and a sketch of its development will be found in 
the Survey, 1928, pp. 75-82. 


law, and safeguard for the world the principle of equal and impartial 
trade with all parts of the Chinese Empire, 19 

was never accepted by the Powers, and within their leased areas, 
obtained in some cases by not too fastidious methods, there was 
sometimes favoritism to their own nationals and of course a 
suspected discrimination against others. This system of favorit- 
ism culminated in the Twenty-one Demands by which Japan, un- 
der the screen of the World War and the Anglo-Japanese Alli- 
ance, sought for itself, exclusive of other Powers, privileges in 
large areas of China. 

Nevertheless the wiping out of German interests in China and 
the collapse of Russia had left Great Britain, the United States, 
and Japan as the only major Powers active and influential in Chi- 
nese affairs, and the Japanese found it impossible to defend and 
maintain their covertly obtained privileges of 1915, once the criti- 
cal attack of the United States and Great Britain was directed 
against them. The insistence of those two Powers on equal trade 
opportunity in the broadest sense necessarily involved as a con- 
comitant the protection of the integrity of the Chinese nation. 
The open door policy, as framed and assented to, was technically 
consistent with "spheres of interest" but in spirit completely at 
variance; and the variance once established, the force more in 
keeping with the world's general direction, viz., that of equal op- 
portunity, was likely to gain the upper hand. In this instance an 
enlightened self-interest made for the safeguarding of the interest 
of another, and the interest of China was the interest of all. 

The British Government had formulated its policy in explicit 
terms in a memorandum of August 11, 1919, presented to the 
Japanese Government : 

One of the fundamental objects of the American proposals as ac- 
cepted by the British, Japanese and French Governments is to elimi- 
nate claims in particular spheres of interest, and to throw open the 
whole of China without reserve to the combined activities of an inter- 
national consortium. This object can not be achieved unless all the 
parties to the scheme agree to sacrifice all claim to enjoy any indus- 

19 For. Rel., 1900, p. 299. 


trial preference within the boundaries of any particular sphere of 
influence. 20 

And China itself, now seeing more clearly than before the iden- 
tification of its own interest with the principle of equal oppor- 
tunity for the commerce and industry of all nations having treaty 
relations with it, declared itself at Washington ready to apply the 
principle in all parts of the Chinese Republic. 

The stage was thus set for the introduction by Mr. Hughes on 
January 16, 1922, of a draft resolution giving expression to the 
policy of the open door in a sense destructive of economic spheres 
of interest. A Japanese effort to amend the proposal so as to pre- 
vent its having retroactive effect was defeated in committee, and 
the Hughes draft became the basis of the Nine Power Open Door 
Pact which was signed with the other treaties on February 6, 
1922. For the first time China was a party to an international 
undertaking vitally affecting its destiny. Its provisions are 
simple. The other Powers agree to respect the sovereignty and 
integrity of China, to assist China in maintaining and developing 
an effective and stable government, to establish the principle of 
equal opportunity for commerce and industry everywhere in 
China, and not to support any agreements of their nationals de- 
signed to create spheres of influence or exclusive opportunities. 
There is to be no unfair discrimination in railroading; China's 
neutrality in time of war is not to be violated; the Powers are 
to communicate with one another whenever circumstances involve 
the application of the Treaty (to which end the Conference 
adopted a resolution for the establishment in China of a Board 
of Reference to investigate and report on such questions, a Board 
which has not yet been created) , and other Powers with govern- 
ments recognized by the signatories are invited to adhere. Article 
III, containing the now authoritative definition of the open door, 
is as follows: 

With a view to applying more effectually the principles of the 
Open Door or equality of opportunity in China for the trade and 
industry of all nations, the Contracting Powers, other than China, 

20 The Consortium: Carnegie Endowment for International Peace. 


agree that they will not seek, nor support their respective nationals 
in seeking: 

(a) Any arrangement which might purport to establish in favor 
of their interests any general superiority of rights with respect to 
commercial or economic development in any designated region of 
China ; 

(b) Any such monopoly or preference as would deprive the na- 
tionals of any other Power of the right of undertaking any legitimate 
trade or industry in China, or of participating with the Chinese Gov- 
ernment, or with any local authority, in any category of public en- 
terprise, or which by reason of its scope, duration, or geographical 
extent is calculated to frustrate the practical application of the 
principle of equal opportunity. 

It is understood that the foregoing stipulations of this Article are 
not to be so construed as to prohibit the acquisition of such proper- 
ties or rights as may be necessary to the conduct of a particular 
commercial, industrial, or financial undertaking or to the encourage- 
ment of invention and research. 

China undertakes to be guided by the principles stated in the fore- 
going stipulations of this Article in dealing with applications for 
economic rights and privileges from Governments and nationals of 
all foreign countries, whether parties to the present Treaty or not. 

Post Offices, Police, and Other Chinese Questions. 

Other complaints were made at Washington by the Chinese 
delegates. The first concerned the foreign postal agencies. These 
agencies were an expansion, required by the disordered conditions 
in China, of the diplomatic pouch and special government mes- 
senger of the foreign Powers, and had grown into regular postal 
services, notably those of Japan whose nationals in China were 
more numerous than those of the other foreign Powers. In view of 
the development of an efficient Chinese postal system the Chinese 
delegates demanded the immediate abolition of the foreign systems, 
which absorbed revenue due the Chinese service and provided a 
channel for the smuggling of opium and morphia. This was 
agreed to on the assurance that the Chinese Government intended 
to retain in office the foreign Co-Director General, a Frenchman ; 
the agreement has been carried out and the foreign post offices 
have been abolished, except perhaps in the Japanese railway zone 


in Manchuria where a dispute exists between the Japanese and 
Chinese as to whether or not the Japanese postal service exceeds 
the requirements of railway operation. 

The Chinese delegation objected also to the maintenance on 
Chinese territory without China's consent of foreign troops, rail- 
way guards, police boxes, and electrical wire and wireless commu- 
nication installations, and asked that each of the eight other 
Powers represented at Washington withdraw any such infringe- 
ments on Chinese sovereignty and issue a self-denying declaration 
as to the future. The Japanese expressed themselves as willing to 
withdraw their troops from Hankow and from the Shantung and 
Chinese Eastern railways under suitable conditions, and those 
troops have been withdrawn; the troops along the South Man- 
churia Railway have been maintained as a protection against the 
disorders of that region. The Chinese delegation may or may not 
have been aware that by its proposal it was raising the whole ques- 
tion of the validity of Japan's position in Manchuria. Mr. Hani- 
hara's reply, at any rate, gave notice that that position, including 
the protection of it by military force which rested on the Treaty of 
Peking of 1905, was not to be questioned. The Conference resolved 
that at China's request the eight Powers should appoint repre- 
sentatives to conduct, with three representatives of the Chinese 
Government, an inquiry into the issues raised by their declaration 
and to make a report for publication. 

Concerning the electrical installations, of which the United 
States maintained three, at Peking, Tientsin, and Tangshan in 
Chihli, the Conference, without deciding whether the existing sta- 
tions had been authorized by China or not, resolved that stations 
in legation grounds should be limited to the transmission of gov- 
ernment messages, and that commercial and personal messages 
and press matter should be transmitted only in case of the inter- 
ruption of all other telegraphic communication ; that all other sta- 
tions operating without Chinese authority should be sold to 
China, and that any questions arising as to the stations in leased 
territories, in the South Manchuria Railway Zone or in the 
French Concession at Shanghai should be matters for discussion 
between the Chinese Government and the other governments con- 


Mr. Hughes introduced in the Conference the broad question 
of international commitments affecting China's interests with a 
proposal for their presentation to the Conference. By unanimous 
resolution the eight Powers engaged to make public, by filing with 
the Secretariat-General of the Conference, all their governmental 
commitments with or relating to China, and all the contracts of 
their respective nationals of a public or privileged character or 
for the sale of arms or ammunition, or involving a lien upon the 
public revenues or properties of the Chinese Government or of 
any of its administrative subdivisions. The publicity thus to be 
given to Far Eastern diplomatic arrangements is broader than 
the requirements of the League of Nations, for it extends to con- 
tracts of private persons which have public effects. 


Of the three remaining important subjects brought before the 
Conference extraterritoriality has its place in the continuous re- 
lations of the United States with China, and the matter of the 
Chinese Eastern Railway, as it stood in 1922, concerned Russia 
and China only. 21 It remains in connection with the Conference 
only to consider briefly the question of Shantung, a question in 
which the United States had no concern of its own but in which 
public interest in the United States had become eager and parti- 
san owing to its implication in the struggles at the Paris Peace 
Conference, to the espousal of the Chinese cause at that time by 
senators who sought to destroy the prestige of President Wilson, 22 
and to the subsequent aggressiveness of Japan in Manchuria and 
Siberia which convinced American opinion that the policy of the 
open door was endangered. With this leverage of national inter- 
est a general sentiment on behalf of a bullied and helpless China 
had been aroused. 

Shantung, in the most densely inhabited part of China, has a 
population of some forty million people. In the heyday of the 
various imperialisms directed against China, Germany, using as a 

21 The fighting of Russian and Chinese armies over the Chinese Eastern Rail- 
way in 1929, as making an occasion for application of the Pact of Paris, is con- 
sidered on pp. 407-426. 

22 See the Survey, 1928, pp. 247 ff. 


pretext the murder of two German missionaries in the province, 
forced China to grant it a lease of Kiaochau bay and city for 
ninety-nine years, together with mining rights and the privilege 
to construct a railway between Kiaochau and Tsinan-fu, capital 
of the province, rights which were availed of. When Japan in 
1914 came into the War Tsingtao and the German properties 
were its prompt objective and these were captured on November 
7. But capture gives no title to a non-assignable lessee interest; 
Japan therefore in its Twenty-one Demands required China to 
assent in advance to any agreement that Japan might make with 
Germany relating to the German rights, interests, and concessions 
in Shantung, and to this China acceded in the Shantung treaty 
of May 25, 1915. 23 Subsequently Japan promised to return Kiao- 
chau itself to China but with the retention by Japan of privileges 
onerous to China. In 1917 Japan obtained the secret promises of 
Great Britain, France, Russia, and Italy to support its preten- 
sions to the German interests in Shantung at any peace confer- 
ence in consideration of its agreement to give the necessary re- 
inforcement to their destroyer flotillas, especially in the Mediter- 
ranean, in the exigency of protecting merchant shipping against 
the unrestricted submarine warfare. 

When China presented at Paris its request for the retrocession 
of the German leasehold interests in Shantung, President Wilson 
discovered to his chagrin that they had been promised to Japan. 
The situation was further complicated by the Japanese demand 
for the recognition of racial equality in the Covenant of the 
League, and the possibility that if both of these aims were denied 
Japan might refuse to become a member of the League and even 
bolt the Conference. 24 Secretary Lansing proposed, therefore, and 
the Council of Four voted, that a statement be sent to the Chinese 

23 This treaty was confirmed by agreements of September 24 and September 28, 
1918, between China and Japan. 

2<t Baron Makino of the Japanese delegation stated that "if Japan received 
what she wanted in regard to Shantung, her representatives at the plenary meet- 
ing would content themselves with a survey of the inequality of races and move 
some abstract resolution which would probably be rejected. Japan would then 
merely make a protest. If, however, she regarded herself as ill-treated over Shan- 
tung he was unable to say what line the Japanese delegates might take." D. H. 
Miller, My Diary at the Conference of Paris, XIX, 196-197. 


informing them that the Peace Conference could not consider this 
important matter and suggesting that it be brought before the 
Council of the League of Nations as soon as that body should be 
able to function. The direct result of this denial was the refusal of 
the Chinese representatives to sign the Versailles Peace Treaty 
and an intense anti-Japanese boycott throughout China. Japa- 
nese terms for the restoration of Kiaochau were unacceptable to 
China and the question was still an open sore at the beginning of 
the Washington Conference. 

China displayed an acute desire to present the Shantung ques- 
tion formally to the Conference, but of the eight other nations 
composing the Conference, six had signed the Peace Treaty and 
three of the most important had in the stress of war promised the 
Shantung interests to their ally ; direct conversations were there- 
fore opened between China and Japan under the auspices of Brit- 
ish and American "moderators." 25 Mr. Balfour's presence was 
auspicious. He had been Prime Minister at the time of the Anglo- 
Japanese Alliance of 1902 and had taken an active part in its 
making; at President Wilson's request he had handled at Paris 
the difficult negotiations over the Shantung controversy in which 
the Japanese had been favored; and at Washington he had by 
his combination of candor and finesse influenced the Japanese to 
accept the 5:5:3 ratio for capital ships. After thirty-six sessions 
the Japanese and Chinese worked out an agreement at Washing- 
ton under which the German leaseholds and other properties were 
to be transferred to China, China agreeing to pay 61,000,000 yen 
for the public properties, the salt interests, and the former Ger- 
man mines and railway, and the Japanese troops were to be with- 
drawn from the province of Shantung. 


THIS section, as its heading indicates, covers more than the direct 
relations between China and the United States. In the first place, 
something must be said of the domestic happenings in China 

25 The term customary for the presiding officer of the New England town meet- 
ing seems appropriate to the service here rendered. 


which conditioned both Sino-f oreign negotiations and the aspira- 
tions of nationalist China. In the second place, although the 
"scramble for concessions" of 1898 is impossible of repetition and 
its effects have been largely undone, nevertheless the shadow of 
foreign jealousies still haunts the China coast, its great water- 
ways, and the foreign settlements which for good or ill have been 
grafted onto the body of China. A Power, magnanimously in- 
clined, may fear to give up a privilege which the other Powers 
may retain to their relative advantage. Another Power may be re- 
luctant to give up a valuable privilege which the Chinese have 
come to regard as a servitude, and may invoke the principle of co- 
operation 28 (so helpful to all concerned under many circum- 
stances) in order "to keep the squadron moving at the speed of 
the slowest vessel." For it has been a characteristic of the treaty 
relations of China that they rest upon the old concept of the con- 
cert of the Powers. The relations, especially the treaty relations, 
of China with one Power have therefore a bearing on its relations 
with another Power, a bearing which does not exist to anything 
like the same extent at least in the relations of such a state as 
France or Great Britain with its sister states. Such a discrimina- 
tion as the United States exercises, for example, with regard to 
selective immigration and the adventitious rights of residence, 
trade, and travel would be impossible for China vis-a-vis the west- 
ern Powers. 

Chinese Aspirations New Method. 

The last twenty years in Cathay have been crowded with events 
which for restlessness and kaleidoscopic drama would match any 
similar period of Tennyson's Europe. 27 And the drama is still go- 
ing on. In the year 1930 China seems like 

... a darkling plain 

Swept with confused alarms of struggle and flight, 

Where ignorant armies clash by night. 

26 Discussed in Chapter 1, Section I. 

27 For an account of the events in China between 1925 and 1928, see "The Rise 
of the Kuomintang," Foreign Policy Association, Information Service, June 22, 
1928, and "The Nanking Government," ibid., October 30, 1929. 


But the ambitions and purposes of most of the individual military 
leaders are perhaps the least significant feature of Chinese chaos. 
The forces that have caused the tensions and upheaval of Chinese 
social and political life, which were briefly described in the chap- 
ter on the Emergence of Modern China, are also in confusion. 
China, as G. E. Sokolsky says, 28 was never "a centrally unified 
country under an absolute despotic emperor," nor is it now "a 
gelatinous chunk of the earth where political form and substance 
is unattainable because the people lack political capacity." The 
military struggle is only the outward expression of the antinomy 
between the primitive unorganized village-community life of the 
"world state" or "area known as China," and the need of a cen- 
tralized, strong government to represent China in the world of 
independent Powers. Put in practical terms, the issue is between 
the demand for such a government and the idea of a loosely or- 
ganized federation in which local autonomy has all the latitude 
compatible with federation and the central government only the 
powers necessary to the discharge of strictly limited responsibili- 
ties. To quote Sokolsky again : 

This experimental period is chaotic, as such periods must be, be- 
cause there is a natural confusion of purpose and ideal, and leader- 
ship is not wholly recognized because it receives its sanction from no 
body beyond its own will. This process of unification of the mass and 
disintegration politically, occurring simultaneously, involves China 
in curious paradoxes. When a Kuomintang spokesman says that 
China is unified, while the machine-guns play a tattoo almost within 
hearing of the national capital, he is not altogether untruthful nor 
quite mad. For the unity of spirit is evident in every phase of Chi- 
nese life, except in political organization and administration. 

Inevitably this must be one aspect of the background against 
which to consider the general aspirations of the Chinese. On the 
question of the extent of the demand for treaty revision, the lan- 
guage of the Simon Report on India is apposite to China, and, 
applied to China, this would read : The Chinese nationalist move- 
ment "directly affects the hopes of a very small fraction of the 
teeming people of China . . . who know next to nothing of politi- 

28 Far Eastern Review (Shanghai), April, 1930. 


cians and are absorbed in pursuing the traditional course of their 
daily lives. But none the less, however limited in numbers as com- 
pared with the whole, the public men of China claim to be spokes- 
men for the whole, and in China the Nationalist movement has the 
essential characteristic of all such manifestations it concentrates 
all the forces which are roused by the appeal to national dignity 
and national self -consciousness." 

All parties and all national or partisan governments are 
equally passionate to rid China of "the unequal treaties." From 
the Paris Peace Conference to the end of 1929 each government 
of the day in China in Peking, Canton, Hankow, and Nanking 
has made the same advances to the Powers to alter the basis of its 
treaty relations. But since the Washington Conference China has 
put its aspirations in the mouth of the mob and on the banner of 
a crusade as well as in the parlance of diplomacy. Here was a dif- 
ferent method of asking for treaty revision, and, such is the way 
of the world, where the politeness of note writing failed the f orth- 
rightness of mob violence, combined with indecision and dishar- 
mony among the Powers, gave a momentum to treaty revision 
which is in progress as these lines are being written. The slogan 
of "Down with the Imperialists" brought internal power to the 
Nationalists. Now that Nationalism is in the saddle it is not likely 
that the crusade will languish in the sphere of foreign relations. 

The Foreign Response. 

In response to repeated overtures on the wings of this agitation 
the United States Government on September 24, 1925, answered 
in the same terms as the other treaty Powers : 

The United States is now prepared to consider the Chinese Gov- 
ernment's proposal for the modification of existing treaties in meas- 
ure as the Chinese authorities demonstrate their willingness and 
ability to fulfill their obligations and to assume the protection of for- 
eign rights and interests now safeguarded by the exceptional provi- 
sions of those treaties. 

This "in measure as" is the stumbling block for Chinese aspira- 
tions, for as long as the "measure" is determined by the foreign 


Power which holds the privilege the Chinese cannot bring them- 
selves to believe that they have an impartial judge. 

It was natural that the initiative in respect of a more substan- 
tial grant of "equity" should be taken by the British ; they were 
the principal architects of the treaty system, they had incurred 
the odium of the Chinese for the shooting of students and demon- 
strators at Shanghai on May 30, 1925, 20 and at Shameen on June 
23 of the same year, and a boycott was hurting trade, exports to 
China having fallen from 125,292,000 Haikwan taels in 1924 to 
92,458,000 in 1925. 80 

On May 28, 1926, the British Government communicated a 
memorandum to the United States Embassy in London importing 
an unwillingness to "attempt to force upon the Chinese a greater 
degree of foreign control over the revenues required for that pur- 
pose (i.e., dealing with the unsecured debt) than they are pre- 
pared voluntarily to concede." 

The new liberality evinced in this memorandum was expressed 
in a considered and elaborate memorandum of the British Govern- 
ment communicated on December 18, 1926, at Peking to the rep- 
resentatives of the Washington Treaty Powers in pursuance of 
the obligation contained in Article 7 of the Washington Nine 
Power Pact. 31 This British document, although not joined in by 
the United States, was of great importance for American policy 
toward China because of the general principle of cooperation and 
the similarity of attitude toward China which were keeping the 
two English-speaking nations in close touch during these critical 
post-Washington years, and because substantial concessions to 
Chinese aspirations by an important western Power which in 
this instance possessed the largest trade and investments would 
be used by Chinese eagerness as the standard to be forced upon 
all; the Chinese have quite definitely made up their minds that 
the squadron shall proceed at the speed of the fastest vessel. This 

20 See p. 171. 

so Foreign Trade of China (1925), Part I, Report and Abstract of Statistics, 
p. 25. 

si "The Contracting Powers agree that, whenever a situation arises which in the 
opinion of any one of them involves the application of the stipulations of the pres- 
ent Treaty, and renders desirable discussion of such application, there shall be 
full and frank communication between the Contracting Powers concerned." 


memorandum, after referring to the political disintegration in 
China in the four post-Washington Conference years owing to civil 
war and the waning central authority, and the simultaneous 
growth of a powerful Nationalist movement, "which aimed at 
gaining for China an equal place among the nations" and de- 
served the sympathy and understanding of the Powers, made the 
following proposals to the Washington Treaty Powers: That 
they should declare "their readiness to negotiate on treaty revi- 
sion and all other outstanding questions as soon as the Chinese 
themselves have constituted a Government with authority to nego- 
tiate"; that they "should agree to the immediate unconditional 
grant of the Washington surtaxes," not acted on by the Peking 
Tariff Conference of 1925 26, 32 and without resting on their pro- 
test against the levy of those taxes by the Cantonese in defiance 
of the treaties ; that they "should declare their readiness to recog- 
nize her [China's] right to the enjoyment of tariff autonomy as 
soon as she herself has settled and promulgated a new national 
tariff"; and that "certain recommendations in the report of the 
Committee on Extra-territoriality . . , 33 and certain other re- 
forms not covered by that commission's report but falling under 
the general heading of extra-territoriality can be carried into 
effect even in present conditions without great delay." Two pas- 
sages offered to the Chinese an encouragement greater than that 
contained in the specific recommendation. 

During this possibly very prolonged period of uncertainty [while 
China might be engaged in overcoming the process of disintegration] 
the Powers can only, in the view of His Majesty's Government, adopt 
an expectant attitude and endeavour to shape developments so far as 
possible in conformity with the realities of the situation so that ulti- 
mately, when treaty revision becomes possible, it will be found that 
part at least of the revision has already been effected on satisfactory 
lines. It would therefore be wise to abandon the policy of ineffective 
protest over minor matters, reserving protest which should then be 
made effective by united action only for cases where vital interests 
are at stake. 

The basic facts of the present situation are that the treaties are 
32 See pp. 152-154. 33 See pp. 179-182. 


now admittedly in many respects out of date, and that in any at- 
tempt to secure revision the Chinese are confronted on the one hand 
with the internal difficulty of their own disunion and on the other 
with the external difficulty of obtaining the unanimous concurrence 
of the Powers. The latest instance of this is the failure of the attempt 
to alter the tariff of 1858. His Majesty's Government attach the 
greatest importance to the sanctity of treaties, but they believe that 
this principle may best be maintained by a sympathetic adjustment 
of treaty rights to the 'equitable claims of the Chinese. Protests 
should be reserved for cases where there is an attempt at wholesale 
repudiation of treaty obligations or an attack upon the legitimate 
and vital interests of foreigners in China, and in these cases the pro- 
tests should be made effective by the united action of the Powers. 84 

On January 27, 1927, this policy was followed up by the Brit- 
ish submission of seven specific proposals to the Chinese authori- 
ties for the modification of Britain's treaty status with China. 
These measures embraced the recognition of modern Chinese law 
courts as the competent courts for cases brought by British plain- 
tiffs or complainants, the recognition of a reasonable nationality 
law, the application as far as practicable in British courts in 
China of modern Chinese civil and commercial codes, the recogni- 
tion of British citizens' liability to pay regular and legal Chinese 
taxation, the consideration of the application to British courts in 
China of a revised Chinese Penal Code, the readiness to discuss the 
modification of the municipal administration of British conces- 
sions, the willingness to accept the principle that British missiona- 
ries should no longer claim the right to purchase land in the in- 
terior and that missionary educational and medical institutions 
should conform to similar Chinese institutions. 35 

Sir Austen Chamberlain, then Secretary of State for Foreign 
Affairs, in a speech at Birmingham on January 29, 1927, fur- 
nished the exegesis for the official memorandum. The policy de- 
clared in the memorandum was, he said, to meet China halfway, 
and he contended that the proposals showed that Britain was go- 
ing more than halfway. 86 

84 A. J. Toynbee, Survey of International Affairs, 1926, pp. 490, 492. 
so Sir Frederick Whyte, China and the Foreign Powers, p. 68. 
86 Ibid., p. 58. 


The American Attitude. 

The lead thus given by the British Government was shared by 
that of the United States. On January 27, 1927, Secretary of 
State Kellogg issued a statement on the Chinese tariff and extra- 
territoriality which was regarded as representing a general 
policy : 

The Government of the United States ... is ready now to con- 
tinue the negotiations on the entire subject of the tariff and extra- 
territoriality or to take up negotiations on behalf of the United 
States alone. The only question is with whom it shall negotiate. As I 
have said heretofore, if China can agree upon the appointment of 
delegates representing the authorities or the people of the country, 
we are prepared to negotiate such a treaty. 

The House of Representatives then expressed its views by 
adopting on February 21, 1927, a resolution introduced by Con- 
gressman Porter, Chairman of the Committee on Foreign Affairs : 

Resolved. . . . That the President of the United States be, and he 
hereby is, respectfully requested to enter into negotiations with duly 
accredited agents of the Republic of China, authorized to speak for 
the people of China, with a view to the negotiation and the drafting 
of a treaty or of treaties between the United States of America and 
the Republic of China which shall take the place of the treaties now 
in force between the two countries, which provide for the exercise in 
China of American extraterritorial or jurisdictional rights or limit 
her full autonomy with reference to the levying of customs dues or 
other taxes, or of such other treaty provisions as may be found to be 
unequal or nonreciprocal in character, to the end that henceforth 
the treaty relations between the two countries shall be upon an equi- 
table and reciprocal basis and will be such as will in no way offend the 
sovereign dignity of either of the parties or place obstacles in the 
way of realization by either of them of their several national aspira- 
tions or the maintenance by them of their several legitimate domestic 

The Nanking Outrage and United States Policy. 

By this time China was in turmoil. The Nationalists from Can- 
ton had reached the Yangtze valley, borne along by political 


agitation as much as by military spirit. Since the agitation was 
compounded of antiforeignism, the danger to foreign lives and 
property was manifest. The American authorities had removed 
from the entire Yangtze valley all Americans who were willing to 
leave and had concentrated them in Shanghai where American 
forces could protect them. Before complete withdrawal could be 
effected an outrage occurred at Nanking on March 23 and 24* 
which brought about a lull in foreign politeness to Chinese aspira- 

It appears that while the troops of the Peking government 
were evacuating Nanking, units in the Nationalist army which 
were occupying the city attacked foreign premises, looted some of 
the foreign consulates, killed six foreigners, wounded seven more, 
and abused a number. 37 Many of the British and American resi- 
dents gathered at the Standard Oil compound for common de- 
fense were protected by a barrage played by American and 
British gunboats, which in covering the escape of the residents 
killed seven Chinese and wounded fifteen. This incident was one 
of the causes of the breach between the Radicals and the Mod- 
erates in the Nationalist party, the Moderates being satisfied that 
the disorderly and murderous acts of the units referred to were 
committed by the direction of the Radicals in order to discredit 
the Moderate element in the Kuomintang. 

After this incident, the United States, Great Britain, France, 
Italy, and Japan presented to the Hankow Nationalist govern- 
ment identic notes demanding punishment of the commander at 
Nanking, apology in writing with a promise to refrain from vio- 
lence or agitation against foreigners in the future, and full repa- 
ration for the injuries and damage. A threat of action was con- 
tained in the conclusion of the notes. The replies of the Hankow 
Nationalist government dated April 14 were not considered sat- 
isfactory. They agreed to make good the damage, if it could be 
proved that the damage was not caused by the bombardment or by 
Peking's troops, to submit the question of punishment and 

37 For an account of the Nanking Incident see report of Consul John K. Davis 
to the Department of State: State Department Release, May 7, 1928. Also for de- 
tails of naval bombardment, Proceedings of the United States Naval Institute, 
January, 1928. 


apology of the troop commanders to the findings of a government 
inquiry then in progress or of an international commission of in- 
quiry, and to protect foreigners in the future. The seventh clause 
of the Chinese note 88 called attention to the "inequitable treaties" 
as constituting 

the chief danger to foreign lives and property in China, and this 
danger will persist as long as effective government is rendered diffi- 
cult by foreign insistence on conditions which are at once a humilia- 
tion and a menace to a nation that has known greatness and is today 
conscious of renewed strength. 

Some of the Powers favored joint military measures of a coer- 
cive character, but the United States, after going a long way with 
the others, withdrew from the negotiations, and the plan for re- 
prisals was dropped. 

Here again was illustrated that characteristic of occasional 
aloofness which has been the qualification of United States co- 
operation in action toward China. In virtue of copartnership in 
the treaty system the United States has always been in the treaty 
concert but not of it, at least for any considerable length of time. 
As John Hay once said : 

The position of the United States in relation to China makes it 
expedient that while circumstances may sometimes require that it act 
on lines similar to those other powers follow, it should do so singly 
and without the cooperation of other Powers. 89 

The Washington Conference in the Four Power Pact and the 
Nine Power Treaty laid down new bases of cooperation, but in 
the press of contact with the exacting post- Washington Confer- 
ence events in China, the half-aloof, half-concurrent attitude has 
had ample demonstration. One contrast to the American action 
over the Nanking affair may be given. In the spring of 1926 a 
joint ultimatum to opposing Chinese armies fighting outside of 
Tientsin was participated in by the United States which de- 
manded, on threat of naval force, that the Chinese cease from in- 

s Eugene Chen to Consul General Lockhart, State Department Release, April 
15, 1927. 

39 For. ReL, 1900, p. 111. 


terfering with the freedom of communications from the sea to 
Peking. The contestants were Marshal Feng Yu-hsiang and Mar- 
shals Wu Pei-fu and Chang Tso-lin. Feng had captured Tientsin, 
occupied the old Taku forts at the mouth of the river, and placed 
mines in the river in order to check the advance of the opposing 
forces up the river. Foreign vessels were stopped and searched, 
and two Japanese destroyers were shelled by the Taku forts, with 
the result that nine Japanese were wounded, one of whom died. 
On March 16, 1926, the Powers sent a joint forty-eight-hour 
ultimatum to the fighting factions demanding the clearing of the 
channel. This was complied with. 

In the Nanking Incident the United States stayed with the 
Powers until the eleventh hour, and then withdrew. Its with- 
drawal, by spelling the end of reprisals negotiations, had a pro- 
found influence on the future of Chinese nationalism. Coercive ac- 
tion of the kind in contemplation would have put treaty revision 
into the background for some time. It would probably have given 
the movement in China a more leftward slant. As it was, the aban- 
donment of reprisals helped to weight the scales in the internal 
struggle on the side of the Moderates, who, while undermining 
and eventually overthrowing the Radical element, were enabled to 
continue their successful career against the northerners which in 
1927 ended in the establishment of their own government at Nan- 
king. For nearly a year the settlement of the Nanking trouble lay 
dormant. Then, just as the United States had broken away from 
reprisals, it elected to take its own line in coming to an under- 
standing with the Chinese. Compared with the threats used a year 
before, the settlement, which was dated April 2, 1928, was mild. 
The United States compounded by accepting an expression of re- 
gret and a promise to pay damages, and dropped the demand for 
punishment of the responsible military leaders. It contented itself 
with the Nationalist statement that the evil deed was done by the 
Communists, of whom some had already been executed and whose 
leader was still at large. The announcement was received with a 
certain chagrin in non-American quarters, but the London Times 
remarked that, "considering that the Nationalist Government of 
today is not precisely the Nationalist Government of last year, a 


vigorous, though not fully effective, effort had been made to root 
out Communism and that the Powers anyhow had not pressed their 
original demand, perhaps much more was not to be expected." 40 
One by one the other Powers followed the American example. 

There was apparently no question of stealing a march on the 
other Powers. "It is understood that the five Powers which partici- 
pated in the despatch of Notes to the Nationalists last spring 
. . . have kept each other fully informed regarding the progress 
of the negotiations." 41 But the "full and frank communication" 
provided for by Article 7 of the Nine Power Treaty apparently 
did not extend to the subsequent signing of the Sino- American 
treaty of July 24, 1928, granting tariff autonomy to China, 42 
which was the prelude to American recognition of the Nanking 
government. For, according to Professor Toynbee, the prelimi- 
nary note by Secretary Kellogg, dated July 24, 1928, was com- 
municated to the other seven signatories of the Nine Power 
Treaty the day before the Tariff Treaty was signed at Peking. 43 
Moreover, the Secretary took no account of the Nine Power 
Treaty provision in his statement on treaty revision on January 
27, 1927. The evolving nature of relations with China has left 
far behind the Nine Power Treaty which lays down a hard and 
fast rule of cooperation. Remarking on the changes in policy 
since the making of the Washington Conference treaties Professor 
Holcombe observes : 

. . . the Nine Power Treaty is already obsolete on account of the 
breakdown of the concert of the Powers and the abandonment of the 
old policy of foreign tutelage. The Four Power Treaty, which pro- 
vides for mutual assistance under certain circumstances in the Pa- 
cific region between the Americans, English, French, and Japanese, 
is a type of regional understanding which is also rendered obsolete 
by the altered conditions in the Far East. 44 

Renewal of Chinese Demands. 

Concurrently with the settlement of the Nanking affair the Chi- 
nese again brought forward their demand for general treaty revi- 

40 April 4, 1930. 4i China Weekly Review (Shanghai), April 7, 1928. 

42 See p. 156. 43 Toynbee, op. cit., 1928, p. 425. 

44 A. N. Holcombe, The Chinese Revolution (1930), p. 346. 


sion. A note of the Nationalist Minister of Foreign Affairs (Gen- 
eral Hwang Fu) to the United States Minister on April 2, 1928, 
contained the following : 

Referring to the notes exchanged this day on the subject of the 
settlement of the questions arising out of the Nanking incident of 
March 24, 1927, the minister for foreign affairs of the Nationalist 
Government has the honor to express the hope that a new epoch will 
begin in the diplomatic relations between China and the United 
States ; and to suggest that further steps may be taken for the revi- 
sion of the existing treaties and the readjustment of outstanding 
questions on the basis of equality and mutual respect for territorial 

The American reply was cautious: the conditions of the time 
necessitated the provisions of the earlier treaties ; the remedying 
of those conditions would afford opportunities 

for the revision, in due form and by mutual consent, of such treaty 
stipulations as may have become unnecessary or inappropriate. 

To that end, the American Government looks forward to the hope 
that there may be developed an administration so far representative 
of the Chinese people, and so far exercising real authority, as to be 
capable of assuring the actual fulfilment in good faith of any obliga- 
tions such as China would of necessity have for its part to undertake 
incidentally to the desired readjustment of treaty relations. 

"His Majesty's Government," read the reply of Sir Miles W. 
Lampson, the British Minister, 

in Great Britain recognize the essential justice of the Chinese claim 
to treaty revision and in their declaration of December 18, 1926, and 
their seven proposals of January 28, 1927, they have made their 
policy abundantly clear and have taken such practical steps as lay in 
their power to carry it into effect. In order to give further expression 
to the friendly and sympathetic attitude which they have always 
maintained towards China, His Majesty's Government in Great 
Britain are prepared in due course to enter into negotiations with 
the Nationalist Government, through their duly authorized repre- 
sentatives, on the subject of treaty revision. His Majesty's Govern- 
ment in Great Britain do not intend to allow the Nanking incident to 


alter their previous attitude towards China and prefer to consider it 
as an episode bearing no relation to their treaty revision policy. 45 

After the conclusion of the tariff treaty with the United States 
on July 24, 1928, Dr. C. T. Wang, who had succeeded Hwang Fu 
as Foreign Minister, using cordial terms as to the traditional 
friendship of the two countries, attempted to go on to general 
treaty revision through the appointment of plenipotentiary dele- 
gates. Minister MacMurray replied on July 30 : 

... In order, therefore, to avoid any possibility of misconception 
as to the purposes of my Government under present circumstances, I 
must point out that, whereas your note to me refers to negotiations 
soon to commence, it is now the fact that such negotiations as the 
American Government had in contemplation have already been satis- 
factorily concluded. 

Repeated declarations of policy by the Nationalist govern- 
ment, declarations containing assurances to the foreign Powers 
as to the moderation and legal orthodoxy of the plans of that 
government, had raised in Dr. Wang the hope that the Powers 
would at once negotiate new treaties on a basis of complete 
equality. A government declaration of June 16, 1928, contained 
the promise that the Nationalist government 

will not disregard, nor has it disregarded, any international respon- 
sibility in consequence of agreements and understandings properly 
and legally concluded and on a basis of equality. 

More specific was the assurance that the Chinese would 

discard any militaristic form of government which has been the prac- 
tice of the past and we shall not tolerate any person aiming at the 
destruction of modern social institutions such as the Communists. 

In a declaration of July 8, the Minister of Foreign Affairs took 
a firmer tone, announcing that all unequal treaties which had ex- 
pired were ipso facto abrogated and that the Nationalist govern- 
ment would 

immediately take steps to terminate, in accordance with proper pro- 
45 George H. Blakeslee, The Pacific Area, pp. 149-150. 


cedure, those unequal treaties which have not yet expired, and con- 
clude new treaties. 

Pending the conclusion of new treaties, interim regulations would 
give to the nationals of the countries whose treaties have expired 
all necessary protection based on international and Chinese law 
and equality with Chinese in respect of taxes. 

The Nationalist party, the Kuomintang, acted as a treaty revi- 
sion spur to its government. The third National Congress, held 
March 15-28, 1929, reiterated by resolution the necessity of 
abrogating the unequal treaties and concluding new treaties on 
the basis of equality and reciprocity. The statement of foreign 
policy of the first Congress had declared an intention not to rec- 
ognize any of China's external debts : 

All of China's external debts which have been negotiated by irre- 
sponsible governments, such as the Peking Government that came 
into power in October, 1923, and have not been used for the promo- 
tion of the people's welfare but for the maintenance of personal 
honors and offices, and the prosecution of civil wars, are unwar- 
ranted. The Chinese people are not responsible for the repayment of 
such debts. 

The third Congress went further, declaring for a consolidation of 
China's foreign loans and a recognition only of such "foreign 
loans as are not injurious to China's political and economic inter- 
ests." The resolution of the Congress was elaborated in a mani- 
festo of the Central Executive Committee of the party issued 
June 18, 1929. 

Revision under Treaty Clauses. 

Some of the treaties contain clauses permitting revision at the 
end of fixed usually ten-year periods. Sharp differences of 
opinion have arisen over the proper construction of these revi- 
sionary clauses. The Belgian treaty contains a clause allowing 
Belgium at the end of a ten-year period to open negotiations for 
modification of the treaty, on six months' notice ; in the absence of 
any such notification the treaty is to remain in force. Since the 


parties disagreed at the end of a ten-year period as to ad interim 
regulations China took the position that the treaty had expired 
and Belgium that it was still in force unmodified. Belgium then 
brought an action in the Permanent Court of International Jus- 
tice to have the treaty sustained ; China, on the other hand, denied 
the jurisdiction of the court, contending that the issue was not le- 
gal but political and came within Articles XI and XIX of the 
Covenant. 48 During the unilateral court proceedings the parties 
negotiated a new treaty and Belgium withdrew its action. 

Denmark, Spain, Italy, and Portugal had treaties with China 
which allowed either party to "ask for a revision of the tariff or 
the commercial arrangements of this treaty" at the end of any 
ten-year period. Between 1926 and 1928 either the Peking or the 
Nanking government declared these treaties terminated in toto at 
the end of a ten-year period, a construction of the revisionary 
clause which was of course rejected by each of the four countries 
in question. The issue was never determined; new treaties were 
signed at the end of 1928 which contain changes in matters other 
than the tariff and commerce and contain the following clause, 
which is also in the new Belgian treaty : 

The two high contracting parties have decided to enter as soon as 
possible into negotiations for the purpose of concluding a treaty of 
commerce and navigation based on the principles of absolute equality 
and nondiscrimination in their commercial relations and mutual re- 
spect for sovereignty. 

The position of Japan in regard to such treaty questions is 
stronger than that of the other Powers because of its contiguity 
and the pressure it can bring to bear in negotiations ; it is weaker 
because industrially Japan has so much at stake the Chinese 

46 Article XI of the Covenant reads in part: 

"It is also declared to be the friendly right of each Member of the League to 
bring to the attention of the Assembly or of the Council any circumstance what- 
ever affecting international relations which threatens to disturb international peace 
or the good understanding between nations upon which peace depends." 

Article XIX of the Covenant reads: 

"The Assembly may from time to time advise the reconsideration by Members 
of the League of treaties which have become inapplicable, and the consideration 
of international conditions whose continuance might endanger the peace of the 


market is indispensable to its industrial prosperity, and the Chi- 
nese boycott is a dreaded weapon. Article XXVI of Japan's 
treaty provides for a revision of the tariffs and of the commercial 
arrangements at the end of ten years, but if no revision be effected 
the treaty is to continue for ten years more. The treaty contains 
extraterritorial clauses and most-favored-nation provisions. On 
July 20, 1928, China declared the treaty terminated in its en- 
tirety. Japan contends that only the tariff and commercial articles 
are open to revision, and that to be effective revision must be com- 
pleted within the six-month term, which would allow of its defeat 
by refusal to agree or by delay. The dispute remains an open 
issue, though the controversy in respect of the tariff has been 
settled. The British treaty of Tientsin of June 26, 1858, which 
contains the grant of extraterritoriality, comes to the end of a 
ten-year period on October 24, 1930 ; it contains a clause like that 
in the Spanish treaty providing for "revision of the tariff and of 
the commercial articles of this treaty." China will probably assert 
the right to terminate the treaty as it did in the cases of Den- 
mark, Spain, Italy, and Portugal. The French treaties of Wham- 
poa of October 24, 1844, and of Tientsin of June 27, 1858, 
granting extraterritorial privileges, provide, like the Belgian, 
that after a ten-year period "the Government of the Empire of 
the French" may negotiate for modification. 

The case of the Sino-American treaties is more complicated. 
The treaties of Tientsin and the supplementary treaty of Peking, 
November 17, 1880, carry the grants of extraterritoriality; they 
contain no provision for revision. The question arises : How long 
do such treaties endure? The treaty on commercial relations, 
signed October 8, 1903, is open for revision January 13, 1934. 
This entire treaty is open to revision, but it contains a clause con- 
tinuing in effect "all the provisions of the several treaties between 
the United States and China which were in force on the first day 
of January, 1900." 

New general treaties "based on equality" have been signed by 
China with Bolivia (1919), Persia (1920), Germany (1921 and 
1928), Russia (1924), Austria (1925), Finland (1926), Greece 
(May 26, 1928), Poland (September 18, 1929), Czechoslovakia 


(February 12, 1930), and Turkey. The Sino-Greek Treaty has 
been signed and ratified by both states; on April 1, 1930, those 
with Poland and Czechoslovakia had been signed, and the Sino- 
Turkish Treaty initialed. In the treaties with Greece, Poland, and 
Czechoslovakia 47 (1) each party recognizes the right of the other 
to regulate its own tariff, (2) each undertakes that its nationals 
shall abide by the laws and regulations of the other and be subject 
to the local tribunals. The Sino-Greek Treaty 48 as published con- 
tains an article which may be interpreted to reserve inland navi- 
gation rights for the nationals of the respective countries: "In 
regard to questions which are not provided for in the present 
Treaty, the two High Contracting Parties agree to apply the 
principles of equality and mutual respect for territorial sover- 
eignty which constitute the basis of the present Treaty." Dr. 
Wang stated on February 12, 1930, that these treaties would be 
used as models for future treaties, being based upon the principles 
of complete equality and reciprocity. 

Rebus Sic Stantibus and Article XIX of the Covenant. 

In the negotiations with the Powers pointing to the abolition of 
extraterritoriality, the Chinese Government vaguely referred to 
the doctrine of rebus sic stantibus. Dr. Wang Chung-hui, Presi- 
dent of the Judicial Yuan of the national government and a 
Deputy-Judge on the Permanent Court of International Justice 
at The Hague, declared in an address January 30, 1929 : 

The extraterritoriality regime is destined to go for many reasons 
. . . according to the well-known principle of international law, 
rebus sic stantibus, changed conditions demand treaty revisions. . . . 
Some 80 years ago when the system of extraterritoriality was intro- 
duced there was only a very small number of foreigners in China. 
They confined their residence and activities in a few treaty-ports. 
Today their number is greatly increased and they scatter themselves 
outside of the treaty-ports. Eighty years ago Chinese law was radi- 
cally different from Western law. Today our law is modelled after the 
Western system. The economic changes during the extraterritorial 
period of some 80 years have brought about fundamental changes in 

47 Week in China (Peking), February 15, 1930. 

48 Chinese A fairs, February 15, 1930. 


the relation between the Chinese people and foreigners in China. Ex- 
traterritoriality, as a modus vivendi, aimed at producing good rela- 
tions between the Chinese and foreigners in China. Today it is bound 
to produce harmful consequences contrary to its original aim. 49 

Revision of treaties and the catch phrase rebus sic stantibus 9 
often confused by text-writers on international law, are two dis- 
tinct things. Whereas revision of treaties falls within the scope of 
diplomatic action, rebus sic stantibus is a rule of interpretation 
or of law according to which in certain events, implied or ex- 
pressed, a treaty has no longer any effect. Viewed in that light 
rebus sic stantibus is comparable to the doctrine of frustration of 
contracts by reason of destruction of the subject matter or other 
condition making performance impossible ; this is well understood 
by the common law lawyer. 

Sir John Fischer Williams argues 50 that the doctrine may well 
be applicable to the treaties between China and the Powers con- 
ferring extraterritorial jurisdiction. If treaties conferring extra- 
territorial jurisdiction are based on the supposition that the servi- 
ent party's judicial system is weak and backward, it may be asked 
whether such treaties do not become "obsolete when the country 
granting the extraterritorial privileges has so far advanced in its 
judicial and general administration as to render those privileges 
no longer necessary for the preservation of peaceful intercourse." 

The Extraterritoriality Commission, appointed by the Powers 
at the Washington Conference of 1922, examined the present 
practice of extraterritorial jurisdiction in China, and reported 
that China's jurisdiction had not improved to the pitch that would 
warrant their relinquishment of extraterritorial rights ; on this as- 
sumption, there being no supervening essential change in the con- 
ditions in relation to which these treaties were made, the doctrine 
itself, though properly invoked, provides the answer to the ques- 

To say that it is not easy to apply the doctrine of rebus sic 
stantibus is simply to admit the inevitable difficulty of a Jegal sys- 
tem that is as weak as international law a weakness which one 

49 Week in China, February 16, 1929, pp. 128-129. 

50 American Journal of International Law, XXII, 95. 


finds in every system of undeveloped law where the political ma- 
chinery from which it draws its strength is still somewhat, in the 
language of Hobbes, in a state of nature. For such a situation the 
best answer is not a legal one, but the flexible and magnanimous 
diplomacy proposed in the British memorandum of December 18, 
1926, addressed to the Washington Treaty Powers. 61 

The same kind of difficulty is presented by China's invocation 
of Article XIX 52 of the Covenant of the League of Nations at the 
1929 meeting of the assembly. This weapon China is now using 
vigorously against those who would still withhold treaty revision. 
The assembly met China's case so far as to appoint a committee 
to consider and report on the best methods to make this article 
effective. No report has yet been made, but it may be surmised 
that the League is confronted with no little embarrassment, in 
view of other treaties, especially the peace treaties, which mem- 
ber states would like to see declared "inapplicable." 

The Treaty Tariff. 

The Nanking Treaty of 1842 and the supplementary agree- 
ments of 1843 provided that duties on British imports and exports 
should be on a basis of approximately 5 per cent ad valorem. The 
most-favored-nation clause of many later Chinese treaties made it 
impossible to change the tariff without the consent of all the 
Powers. The Treaty of Tientsin of 1858 made most of the rates 
specific instead of ad valorem, so that with the continual increases 
of price indices the effectiveness of the rates steadily declined. To 
offset these price changes the Treaty Powers agreed in 1902, 
1918, and 1922 to allow increases in the specific customs duties. 
This limitation of the tariff in the early days was one of the de- 
vices used to force China into trade relations with the West and to 
maintain this intercourse on the terms laid down by the for- 

Chinese objections to tariff restriction are summarized by Pro- 
fessor Mingchien Joshua Bau of the National University of 
Peking : 

5i See p. 135. 52 g e e p. 146, footnote. 


It is non-reciprocal ; China receives no concessions from the coun- 
tries which control its tariff. 

It is irrational, making no distinctions between commodities, e.g., 
luxuries and necessities. 

It has no relation to the needs of revenue. 

It prevents a "protective" system for the development of "infant 
industries" or industries necessary in time of war. 

It necessitates the existence of the pernicious tax known as likin. 68 

Above all it impairs Chinese "sovereignty," i.e., the power of a 
state to act without foreign interference. 54 

Germany and Austria-Hungary lost their share of tariff con- 
trol by the Chinese declaration of war on August 14, 1917. As 
China refused to sign the Treaty of Versailles, formal relations 
were renewed by a declaration of the German Government and an 
agreement with China of May 20, 1921. Article 4 of this agree- 
ment stipulates that "no duties higher than those paid by na- 
tionals of the country shall be charged on products, whether raw 
or manufactured, coming from one of the two Republics, or from 
another country, when such products are imported, exported or 
in transit." It was renewed on August 17, 1928. The new treaty 
of Austria with China was made October 19, 1925. The renuncia- 
tion of tariff privileges by Hungary was secured by "Section IV 
China" in the Treaty of Trianon. 

The U.S.S.R. renounced its privileges by declarations of July 
25, 1919, and September 27, 1920. In agreements on "general 
principles for the settlement of questions" between China and the 
U.S.S.R. signed at Peking, May 31, 1924, arrangements were 
made for a conference to be held within a month for detailed ar- 
rangements concerning, inter alia, a "Customs Tariff for the two 
Contracting Parties in accordance with the principles of equality 
and reciprocity." 55 The conference has not been held. 

The Chinese plea at Paris for tariff autonomy was put aside. At 

53 Likin means a percentage tax. Its interference with trade may be indicated 
by the fact that in 1921 there were no fewer than 700 collectorates in China. Likin 
has been called the greatest obstacle to China's industrial development. See Bulle- 
tin of the Chinese Government Bureau of Economic Information, May 6, 1921. 

54 China and World Peace, p. 73. 
68 China Year Book, 1924, p. 1194. 


Washington more progress was made ; the Powers arranged for a 
"Revision Commission" to "meet at Shanghai, at the earliest 
practicable date," to revise "the customs schedule of duties on im- 
ports into China ... so that the rates of duty shall be equiva- 
lent to 5 per cent effective" (for the reasons given above, the 
Chinese schedule of rates, at the time of the Washington Confer- 
ence, amounted to only 3% per cent effective) ; and for a confer- 
ence to conduct negotiations for the abolition of likin and for 
tariff increases up to 12^/2 P er cen t on imports, expectantly pro- 
vided for but never realized by American, 56 British, and Japa- 
nese treaties of 1902 and 1903. This conference was specifically 
authorized to agree to additional import duties, above the normal 
5 per cent, of 5 per cent on luxuries and of 2^ per cent on all 
other commodities. These new duties were popularly called "the 
Washington Conference surtaxes." 

The Revision Commission met at Shanghai in 1922 and ef- 
fected the revision necessary to grant China an effective 5 per cent 
duty on imports. 

The Tariff Conference of 

The controversy between China and France over the question 
whether the French share of the Boxer Indemnity should be paid 
in gold francs as the French insisted or in depreciated paper 
francs delayed the holding of the tariff conference for more than 
three years. The French case was sound, but it was unfortunate 
that France should have allowed the individual controversy to 
hold up the Chinese tariff question in which thirteen Powers were 

The Conference met at Peking on October 26, 1925. Thirteen 
Powers were represented: China, the United States, Belgium, 
Denmark, France, Great Britain, Italy, Japan, the Netherlands, 
Norway, Portugal, Spain, and Sweden. The Chinese delegates 
opened the sessions with proposals for treaties providing for com- 
plete tariff autonomy ; the abolition of likin, without making this 

50 The Sino-American commercial treaty was dated October 8, 1903. The in- 
creases were never realized because they were based on the making of similar 
agreements by the other Powers, and of those Powers only Sweden acted. 


promise a condition of the surrender of the foreign privileges ; and 
surtaxes higher than those named at Washington. 

So far as concerned the principle, the Chinese proposal for 
tariff autonomy met with a hospitable reception from both the 
British and the American delegations. The British had already 
expected that the Conference might recommend "the full realiza- 
tion of China's claim to complete liberty of action in matters re- 
lating to her tariff" and that they might call upon their Govern- 
ment to ratify such further measures as the Conference might 
recommend in order to accomplish that realization within a reason- 
able period. The American delegation expressed no less respect 
for the Chinese desires and was willing to negotiate a new treaty 
granting tariff autonomy. It suggested the levying of the Wash- 
ington surtaxes in 1926; that three months after the coming of 
the new treaty into force China should be allowed as an interim 
revenue to impose import duties at rates from 5 per cent to 12% 
per cent until full tariff autonomy should be achieved ; that likin 
and similar internal taxes should be abolished and that if such 
taxes should be collected the customs administration should re- 
fund a similar amount ; and that the Chinese should be entitled to 
full tariff autonomy on January 1, 1929, as suggested by the Chi- 
nese delegation. The inducement to the provinces to abandon likin 
lay in the proposal that "funds from the customs revenues shall be 
apportioned among the provinces in lieu of likin." 

The Japanese also accepted Chinese tariff autonomy in prin- 
ciple, but, like the other Powers, wished to see a concurrent aboli- 
tion of likin ; the distinguishing feature of their proposal was that 
each contracting Power should be allowed to negotiate with China 
for reciprocal conventional tariffs on certain special articles, 67 
obviously in order that Japan might safeguard its trade in spe- 
cial goods. 

Out of these views emerged the two following resolutions 
adopted on November 19, 1925, by the Committee on Provisional 
Measures of the Conference : 

67 Mr. Hioki's statement, November 2, 1925, second session of the Committee on 
Tariff Autonomy, Far Eastern Times, November 4, 1925, quoted in Problems of 
the Pacific (1927); Proceedings of the Second Conference of the Institute of 
Pacific Relations (University of Chicago Press, 1928), p. 244. 


The Contracting Powers other than China hereby recognize 
China's right to enjoy tariff autonomy; agree to remove the tariff 
restrictions which are contained in existing treaties between them- 
selves respectively and China ; and consent to the going into effect of 
the Chinese National Tariff Law on January 1, 1929. 

The Government of the Republic of China declares that Likin shall 
be abolished simultaneously with the enforcement of the Chinese Na- 
tional Tariff Law ; and further declares that the abolition of Likin 
shall be effectively carried out by the first day of the first month of 
the eighteenth year of the Republic of China (January 1, 1929). 58 

The Conference held its sessions in the midst of civil war and 
seven of the ten Chinese delegates were constrained to abandon 
the proceedings. For this reason and because the Nationalist gov- 
ernment at Canton and the leaders of the Kuominchun (Marshal 
Feng's army) stated that they would not recognize any action 
taken by the Conference, it came to an inconclusive end. 

The differences of view of the major Powers represented at the 
Conference produced some irritation that discharged itself harm- 
lessly in the press and in government correspondence. Of these 
differences the most considerable seem to have arisen from Japan's 
proposal to grant tariff autonomy subject to a tariff reciprocity 
treaty which should maintain low rates upon cheap grade goods 
exported by Japan, and to have the unsecured loans served by the 
proceeds of the surtaxes, special reference being made to the 
Nishihara loans ; from the desire of the British that a considerable 
portion of the increased revenues should be devoted to construc- 
tive work, especially railway development in China ; and from the 
issue whether the undertaking on the part of China 

to abolish likin should be regarded as integrally related to the under- 
takings upon the part of foreign powers to surrender their treaty 
rights of control of China's customs, so that one promise should be 
regarded as the reciprocal of the other, or whether the two undertak- 
ings were to be regarded as independent of each other. 59 

ss From the Official Bulletin, Special Tariff Conference, Committee II, fourth 
meeting at Chu Jen Tang, on Thursday, November 19, 1925, at 10 a.m., Peking 
Daily News, November 20, 1925. 

59 W. W. Willoughby, Foreign Rights and Interests in China, pp. 838-840. 


The Washington Surtaxes. 

The Cantonese government promptly began to collect "the 
Washington surtaxes," although the Conference had not author- 
ized them, the natural eagerness of revolutionary governments be- 
ing increased by the impatience of the Chinese over the French de- 
lay in bringing on the Conference. After the British memoran- 
dum of December 18, 1926, 60 advocated the concession of these 
surtaxes, the Peking government of the north ordered their col- 
lection, and dismissed Sir Francis Aglen, the Inspector-General, 
for his refusal to collect them. 61 

But the Nationalists did not content themselves with a moder- 
ate success and in 1927 imposed surtaxes of 30 per cent on wine 
and spirits and of 50 per cent on tobacco. The Americans, British, 
and Japanese invoked their treaty powers to prevent these levies 
from being exacted. The British Court in China ordered the re- 
lease of British goods upon the payment of the regular (treaty) 
5 per cent duty plus the 2^ per cent surtax, which had been rec- 
ognized by the British Government. The Japanese Court in 
Shanghai ordered the release of Japanese goods (liquors and to- 
baccos only were in question) upon the payment of only 5 per 
cent duty. The American Court felt that it had no jurisdiction, 
Commissioner Lurton ruling: "It seems that the main question 
herein involved develops into a purely political one, and must be 
settled by the Executive Department of our Government." The 
result of this ruling was the immediate cancellation of shipping 
contracts on American ships on the Pacific. Evidently as a result 
of this situation, the Department of State took positive action to 
protect American shippers and maintain treaty rights. In a letter, 
October 3, 1927, to the Shanghai American Chamber of Com- 
merce, Consul-General Edwin S. Cunningham, at Shanghai, stated 
that, although the Department of State had earlier instructed him 
that the Consulate-General "could not become the depository for 
Customs revenues," it now authorized him to accept from Ameri- 
can merchants payment of the treaty duty, 5 per cent, on wines 
and liquors and tobacco products, and that this would effect a 

GO See p. 135. 

si The procedure was later changed to a gazetting on leave for a year. 


legal release of these goods from customs. The Chinese, however, 
withdrew the excess rates. 

Negotiating Tariff Autonomy. 

The proposal of the British memorandum of December 18, 
1926, to the Powers to grant "the Washington surtaxes" came 
into collision with the treaty-making provisions of the United 
States Constitution. There was a treaty fixing the customs duties 
at 5 per cent, and no organ of the United States Government 
could allow an alteration in those duties without a formal treaty 
ratified by the Senate of the United States. So said Mr. Kellogg 
in a statement on American policy in China of January 27, 1927. 
At the same time he made clear the disposition of the Executive: 

The United States is now and has been, ever since the negotiation 
of the Washington treaty, prepared to enter into negotiations with 
any Government of China, or delegates who can represent or speak 
for China, not only for the putting into force of the surtaxes of the 
Washington treaty, but entirely releasing tariff control and restor- 
ing complete tariff autonomy to China. . . . 

The capture of Nanking by the Nationalist armies in 1927 
gave the Nanking government the authority which Mr. Kellogg 
had predicated as the condition of a tariff -treaty negotiation. A 
treaty between China and the United States was therefore signed, 
July 24, 1928, which provides : 

All provisions which appear in treaties hitherto concluded and in 
force between the United States of America and China relating to 
rates of duty on imports and exports of merchandise, drawbacks, 
transit dues and tonnage dues in China shall be annulled and become 
inoperative, and the principle of complete national tariff autonomy 
shall apply, subject, however, to the condition that each of the high 
contracting parties shall enjoy in the territories of the other with 
respect to the above specified and any related matters treatment in 
no way discriminatory as compared with the treatment accorded to 
any other country. 

The nationals of neither of the high contracting parties shall be 
compelled under any pretext whatever to pay within the territories 
of the other party any duties, internal charges or taxes upon their 


importations and exportations other or higher than those paid by 
nationals of the country or by nationals of any other country. 62 

Fulfilment of the terms of this conditional release of control be- 
gan at once, and by December of the same year all the Treaty 
Powers but Japan had signed treaties conceding tariff autonomy 
to China. 63 

On February 1, 1929, China put into effect a new national 
tariff under which it exercised virtual autonomy, though the 
schedule was that which had been drafted in common with the 
Powers at the abortive Tariff Conference. 

The Japanese Position. 

The position of Japan is more difficult in respect of Chinese 
tariffs than that of any of the other Powers because of its depend- 
ence upon the Chinese market, especially in the case of low-priced 
manufactures, such as cheap cottons. A Japanese delegate stated 
at the Peking conference : 

An immediate enforcement of a surtax at a higher rate than 
would seriously disturb the trade relations between China and other 
countries and more particularly would vitally affect the industry and 
commerce of Japan. 64 

The Japanese delegate, while unwilling to oppose the trend of 
affairs, proposed accordingly that until January, 1929, 

China, on the one hand, and the other contracting powers, on the 
other, shall conclude severally treaties which may incorporate re- 
ciprocal conventional tariffs to be applied on certain special articles 
if so desired by both parties. The new treaties so concluded shall con- 
tinue in force for a certain definite period. 65 

As February 1, 1929, the date fixed by the Nanking govern- 
ment for the coming into effect of the new national tariff, ap- 

62 United States, Treaty Series, No. 773. Ratifications were exchanged at Wash- 
ington, February 20, 1929, but by the terms of the treaty its provisions did not 
become effective until four months later long after the Chinese national tariff 
had been put into operation. Blakeslee, op. cit., p. 11. 

ss Some of these treaties deal tentatively with extraterritoriality. 

64 China Year Book, 1926, p. 1134. 65 md. f p. 1128. 


proached without the making of such a special treaty as the Japa- 
nese desired, Japan gave its consent to the new tariff for one 
year. Before the year had expired such a special treaty was in 
process of negotiation, and on March 12, 1930, a Sino- Japanese 
Tariff Agreement was initialed by Mr. Shigemitsu, the Japanese 
Charge (T Affaires, and Dr. C. T. Wang, and signed on May 6. 66 
An annex provides for reciprocal treatment of certain articles 
produced by the two countries. On a long list of goods, including 
cotton goods, fishery products, and wheat and flour, produced or 
manufactured in Japan, the Chinese Government agrees to main- 
tain the existing import duty as the maximum rate for three 
years. By the signature of this agreement China has gained not 
only practical tariff autonomy, which it possessed before the 
agreement, but legal tariff autonomy, for which Japan's consent 
was necessary. 

On February 1, 1929, the new national tariff carrying rates be- 
tween 7^& per cent and 27% per cent ad valorem, with a free list 
for cereals, flour, books, etc., went into effect amid popular re- 
joicing, and, in the graceful Chinese phrase, the nation was "be- 
dewed with its advantages." 67 But rare will be the fortune of 
China if it succeeds in avoiding the plagues of the factory system 
and the host of evils which wait upon "the encouragement of vital 
industries necessary for the economic self-sufficiency of a state in 
time of war. 5568 


Likin did not come to an end but continued to hamper trade. 
Professor Bau says 69 that it 

is a provincial revenue collected and expended by the provincial au- 
thorities, now generally known as tuchuns, tupans, war lords, or 
what not. If the Central Government should be in full control of 
these provincial satraps, the abolition of likin might be effected with 
no great difficulty and delay. Now, as it is well known, because of civil 

66 Week in China, May 10, 1930. 

67 See Tyler Dennett, Americans in Eastern Asia, p. 149. 
es Problems of the Pacific (1927), op. cit., p. 239. 

69 China and World Peace, p. 73. 


war and the breakdown of the central authority and the assumption 
of power by these tuchuns, or tupans, who virtually regard them- 
selves as uncrowned kings of their realms, the abolition of likin has 
become a concomitant question with the assertion of the central au- 
thority, the abolition of tuchuns, and the unification of China. Added 
to this are the attendant obstacles of finding a substitute of revenue 
to replace likin and a livelihood for those thousands of Chinese now 
subsisting on the collection of likin. 

It was not the existence of such exactions that directly embar- 
rassed trade, but the uncertainty of their number and amount 
which made it impossible for merchants to make prices ; if they 
can know the amount with certainty they can transfer it to the 
consumer. To remove the disturbing element, the manager of the 
Standard Oil Company arranged with Mr. Soong, Minister of 
Finance, to pay the Nanking treasury a fixed amount for likin 
and other internal taxes. All exactions levied on the Standard 
Oil Company are credited against this obligation, and the balance 
paid annually. If the sum of these payments exceeds the sum fixed, 
the Standard Oil Company receives a refund from the govern- 
ment treasury. Similar arrangements were made by the Asiatic 
Petroleum Company, the British-American Tobacco Company, 
and other large concerns. 

The State Council of the Nanking government on January 17, 
1930, issued a mandate ordering the abolition of likin throughout 
all China from October 10, 1930, but it is difficult to see how this 
can be accomplished in the present turmoil. 

Customs Administration. 

Foreign administration of the Chinese customs service dates 
from the T'aip'ing Rebellion which threw into confusion the sys- 
tem of collection. To end this confusion an agreement was reached 
between the Taot'ai, or prefect, of Shanghai, and the Consuls of 
Great Britain, France, and the United States, whereby the collec- 
torate of customs was temporarily vested in three foreign ap- 
pointees. Under this regime, which dates from July 12, 1854, 
duties began to be levied by the foreigners on behalf of the Chi- 
nese Government. The system was found to work so satisfactorily 


that the continuance of foreign superintendence was solicited by 
the Taot 5 ai after the trouble had ended. Mr. H. N. Lay thence- 
forward became permanent inspector of the Shanghai customs. 
During the negotiation of the 1858 treaty the Chinese Commis- 
sioner assented to an extension of the system to all the open ports, 
and Mr. Lay was commissioned in the following year to institute 
an inspectorate at Canton. The service rapidly developed, and 
without doubt has done much to keep China intact as a state in 
the stormy days of the Republic. Since the days of Sir Robert 
Hart, who succeeded Mr. Lay, the customs service has taken on 
many other functions, starting the postal service, manning light- 
houses, etc. 

In 1898 the Chinese Government promised to maintain an Eng- 
lishman as Inspector-General as long as the trade of Great Brit- 
ain with China should be greater than that of any other country. 
"But, 55 the Chinese note stated, "if at some future time the trade 
of some other country at the various Chinese ports should become 
greater than that of Great Britain, China will then, of course, not 
be bound necessarily to employ an Englishman as inspector-gen- 
eral. 9570 

Japanese trade has for some time exceeded that of Great Brit- 
ain ; the trade of the United States does so now ; 71 but under two 
loan agreements, at present effective, of 1896 and 1898, the 
Chinese Government promised to continue "the administration of 
the Chinese Imperial Maritime Customs Service as at present con- 
stituted through the continuance of the loan. 55 The longer of 
these loans cannot be retired by the Chinese Government before 

In the report of Mr. Soong, Chinese Minister of Finance, made 
public March 3, 1930, the following bears upon the customs ad- 
ministration : 

Until the summer of 1928 the Customs Administration under the 
nominal control of the Shui Wu Chu at Peiping was a thoroughly 
denationalized administration, with the Inspector-General jockeying 

70 MacMurray, Treaties and Agreements with and Concerning China, I, 105- 

71 See p. 237. 


between the Legations and the Government for instructions and 
opinions. In June, 1929, the Shui Wu Chu was abolished and the 
Customs Administration placed under the Kuan Wu Shu, which is an 
integral part of the Ministry of Finance. The policy was initiated 
that while the administrative integrity of the Customs with its civil 
service traditions would be maintained, the Customs should concern 
itself solely with the collection of revenue in implicit obedience to the 
orders of the Government and divest itself of all political and extra- 
neous functions and associations. In so doing the Customs has only 
improved its position and reputation and increased its usefulness. 

Another anomaly which is being remedied is the discrimination 
which has existed against Chinese in the higher ranks of the Customs 
service : for fifty years no Chinese reached the rank of Commissioner 
of Customs. The principle has now been laid down that promotion is 
based solely on merit and that there will be no recruiting of for- 
eigners for the service except for technical work under the direct in- 
struction of the Minister of Finance. At the same time the Customs is 
recruiting more highly trained Chinese to the service, and during the 
year graduates of universities abroad have been admitted after care- 
ful examinations. Further, with a view to improving the standard of 
our nationals in the higher ranks, several present members of the 
Customs Administration, who are already graduates of colleges in 
China, have been sent to England and America to study the Customs 
Administrations there. 

Since the inauguration of the new policy of the Government, which 
has been loyally observed by the present Inspector-General, one Chi- 
nese has become a full commissioner, seven have become acting com- 
missioners, one has become a deputy commissioner, and eight have 
become acting deputy commissioners. 72 


The Development of the International Settlement. 

Some of the most important trading communities in China are 
under the control and administration of foreigners. Save for the 
International Settlement at Amoy (and of course the Legation 
Quarter in Peking) , however, the United States is interested only 
in the governance of the International Settlement of Shanghai, 

72 Week in China (Peking), March 15, 1930. 



Reprinted from Foreign Affairs, October, 1927. 


which has grown into a huge and complicated municipality whose 
future constitutes a special problem of major proportions. 78 

To the foreign trader in China it is an islet of security in a 
tumultuous ocean of Chinese trouble an islet which puts at his 
service modern granite buildings, electric lighting, factories and 
warehouses, telephone service, personal security and traffic con- 
trol, luxurious western hotels, clubs in the English fashion in 
short, all the paraphernalia of "civilization." 

The great port of Shanghai is situated on a feeder of the 
Yangtze estuary called the Hwangpoo, which is little more than a 
tidal channel penetrating some forty miles into the interior where 
it helps to drain off the waters accruing from the complicated net- 
work of interior lakes. A few centuries ago this river barely ex- 
isted, and much of the countryside north and east of Shanghai is 
the growth of the last three hundred years. In fact, the entire 
province of Kiangsu, in the extreme east of which Shanghai is 
situated, is made up of the silt brought down from central Asian 
ranges by the "Great River." 

73 Foreign-controlled areas are called concessions or settlements. The term 
"concession" is applied to an area which is leased for a term by the Chinese Gov- 
ernment to a foreign Power on a land tax basis; the local consul makes some 
leases to foreign nationals which are the subject of transfer. A "settlement" is 
an area once set apart by the provincial Chinese authorities with imperial consent 
for the residence of trading foreigners. 

The Chinese have recovered nine former concessions. When China declared war 
on the Central Powers, it took over the German concessions in Tientsin and 
Hankow and the Austro-Hungarian concession in Tientsin; these seizures 
were recognized as valid by the Treaty of Versailles, 1919, and the Sino-German 
Treaty of 1921, and by the Treaty of Saint-Germain-en-Laye, 1919. Further, when 
China terminated all relations with the old Czarist regime, September 23, 1920, 
it took over the important Russian concessions in Tientsin and Hankow; and in 
the Sino-Soviet agreement of May 31, 1924, Russia recognized the new status of 
these former municipal areas. More recently, in the early part of 1927, influenced 
largely by the antiforeign disturbances in the Yangtze, the governments of 
Great Britain and China (Hankow) arranged through the Chen-O'Malley agree- 
ments, February 19 and March 2, to hand over to Chinese control the British con- 
cessions in Hankow and Kiukiang. The latter was retroceded without conditions, 
but a long detailed agreement was made for the future administration of the Brit- 
ish concession area in Hankow. The Belgian Government, after two years' nego- 
tiation, retroceded its concession in Tientsin to China in 1929. The British Govern- 
ment, the same year, returned to China the British concession in Chinkiang. The 
British Government has also expressed its willingness to negotiate for the retro- 
cession of its Tientsin concession. A draft agreement for this purpose has been 
drawn up and initialed by the British and Chinese delegates, but the final detailed 
agreement has not yet been signed. See Blakeslee, op. cit. f p. 48. 


The almost exclusively alluvial soil has made the area around 
Shanghai a garden of abounding fertility. From it most of our 
early notions of the fertility, dense population, crowded cities, 
and refined luxuries of China have been drawn. Five centuries ago 
Marco Polo witnessed in this province wonders which were not 
credited until they had been verified by later generations. Here, 
two hundred years after Marco Polo, the Jesuit missionaries, be- 
ginning with St. Francis Xavier, fresh from the squalid cities and 
barbarous societies of Europe, admired and described for incredu- 
lous readers the wonders of an ancient and ingenious civilization. 
And here a patient peasantry have cultivated their rice and busied 
themselves with the manufacture of silk from a period long ante- 
cedent to the Christian era. 

During the hostile operations of 1841 a British naval and mili- 
tary expedition was sent to the mouth of the Yangtze, where Ad- 
miral Parker and Sir Hugh Gough amused themselves by knock- 
ing down such Chinese fortifications as came in their way. One of 
the victims of this undignified mode of warfare was the little 
walled town of Shanghai, which, when the Treaty of Nanking was 
signed in 1842, was included among the four ports thrown open to 
trade in addition to Canton. In 1843 Captain Balfour arrived to 
establish both a "factory," as the old trading posts were called, 
and a consulate. 

As with most other foreign settlements in China, the "ghetto" 
designated for "barbarian" residence was a mud bank outside the 
native city. On marshy waste ground along the river bank bought 
up from the Chinese owners former holdings of reed beds, paddy 
field, or garden patch arose the hongs of British firms. To this 
thriving trading post, foreigners other than British, attracted by 
the possibilities of the silk trade, found their way. Its prosperity 
was threatened in 1853 through the capture of the native city of 
Shanghai by a band of armed bandits, availing themselves of the 
straits to which the imperial authorities had been reduced by the 
beginnings of the T'aip'ing Rebellion in southwestern China. 
Though the presence of a British squadron in the river prevented 
any attack on the foreign residences, the helpless Chinese, hitherto 
scornful of the foreign traders, flocked for safety to the post, as 


they have done in later times, especially since the establishment of 
the Republic. For a short time the old "factory" had a wider im- 
portance, but the native city was regained by a besieging imperial 
force, and the refugees were persuaded to return to their homes 
and leave the post again to its isolation. 

The importance of Shanghai had so far advanced by 1856 that 
the eleven mercantile establishments of 1844 had increased to 
seventy, with upward of 330 foreign residents (exclusive of their 
families), and eight consulates. Trade and prosperity grew at a 
prodigious pace after the opening in 1858, under the Treaty of 
Tientsin, of navigation on the Yangtze to foreign vessels. But 
the principal impetus came from the T'aip'ing Rebellion. This 
outbreak lasted altogether fourteen years, 185165, and took 
a toll in life of twenty millions, besides laying waste huge tracts 
of China's fairest countryside and leveling thousands of price- 
less monuments to Chinese civilization. The movement from Nan- 
king, which began in the spring of 1860, rapidly overran the 
fertile plains of Kiangsu, city after city falling before the bar- 
barous insurgents, named by themselves the "heavenly hosts." 
Even Soochow, the seat of the provincial government, one of the 
greatest and wealthiest of Chinese cities, had to be abandoned by 
the panic-stricken imperial authorities. From this place to Shang- 
hai is a distance of ninety miles. Instantly the port was converted 
from a peaceful trading community into a vast Chinese city, 
inhabited by hundreds of thousands of Chinese refugees (driven 
off their land by the onward sweep of the devastating T'aip'ings) 
and garrisoned by large naval and military forces of all the 
Treaty Powers. 

Today the old trading post is one of the world's leading ports. 
In shipping entered and cleared, over thirty million tons a year, 74 
some authorities would place it third to London and New York. 
Its hinterland is the whole of the Yangtze valley basin, containing 
nearly two hundred million people. The Yangtze is the Missis- 
sippi of China. If the Mississippi flowed into the Atlantic with 
New York as its mouth, the situation would parallel the Yangtze 
and Shanghai. In these modern days the "Great River" is bring- 

74Ching-lin Hsia, The Status of Shanghai (Shanghai), p. 117. 


ing down a wealth of trade (as well as silt) which will grow when 
peaceful conditions return and enhance still further Shanghai's 
commercial importance. From the port radiate trade routes to 
half a dozen treaty ports on China's coast line that concentrate on 
Shanghai the commerce to and from other sections of China. 
Roughly it may be said to be the distributing center for a coast 
line 800 miles in extent. This has made Shanghai responsible for 
40 per cent of China's foreign trade and 25 per cent of its transit 

The inhabitants of the foreign settlement itself 802,700 Chi- 
nese today and only 30,565 foreigners are crowded within limits 
of eight and two-thirds square miles. Around the foreign settle- 
ment cluster Chinese-administered communities Chapei, Woo- 
sung, Pootung, Nantao, and the old Chinese city all nourished 
on Shanghai trade. A fair estimate of the Chinese population of 
"Greater Shanghai" would exceed two and one-half million. Great 
Britain alone is said to have invested 150 million in Shanghai. In 
addition to banks and business houses there are over 250 modern 
factories which can obtain cheap coal from the Yangtze provinces 
of Hunan and Kiangsi. Over Shanghai's activities presides a Mu- 
nicipal Council which in 1929 spent about seven million dollars on 
administration. The old trading post, in short, is the laboratory 
of modern China, in which all the industrial and scientific ideas of 
the West are tested and then passed on to interior China. 

Legal Status of the Settlement. 

The official title of the Settlement is "the Foreign Settlement at 
Shanghai north of the Yang-King-Pang," but in recent years the 
name commonly given to it is the International Settlement. Its 
administrative development has kept pace with its physical 
growth. The British treaties of 1842, 1843 (supplementary), and 
1858 (Treaty of Tientsin) described the "privileges, advantages 
and immunities" at the newly opened ports as "including the 
right of residence, of buying or renting houses, of leasing land 
therein, and of building churches, hospitals, and cemeteries." 
These treaties contain no authority for a special settlement or 
municipality and so far as the Imperial Government was con- 


cerned the local arrangements were a matter of indifference and 
were left to the local Taot'ai (superintendent of circuit, and 
superintendent of treaty-port trade). The legal bases of the 
status of Shanghai are thus complicated and confusing. 75 

Its status as a municipality was derived by inference from cer- 
tain "land regulations." The influx within the limits of territory 
officially assigned as the British settlement led to discussions be- 
tween the British consul and the local Taot'ai which in 1845 
resulted in regulations, approved by the Ministers in Peking, 
providing that application must be made to the British authori- 
ties to acquire land or build houses. These did not satisfy na- 
tionals other than British, and after the troubles in 1853 the 
opportunity was taken to provide a more comprehensive plan not 
only for the protection and management of the settlement, but 
for its more comprehensive government. New regulations were 
prepared by the consuls of the three Powers having treaties with 
China. The record is not clear as to whether or not these were 
submitted to the Taot'ai. 76 On July 11, 1854, this document was 
accepted by a public meeting of land renters constituting them- 
selves a sort of constituent assembly for the future form of gov- 
ernment of a large community of foreigners of diverse nationali- 
ties. A municipality came into existence with the adoption of 
these regulations. Article X of the 1854 regulations reads in 
part : 

It being expedient and necessary that some provision should be 
made for the making of roads, building public jetties and keeping 
them in repair, cleaning, lighting, and draining the Settlement gen- 
erally, and establishing a watch or police force, the foreign Consuls 
aforesaid shall at the beginning of each year convene a meeting of 
the renters of land within the said limits, to devise means of raising 
the requisite funds for these purposes ; and at such meeting it shall 
be competent to the said renters to declare an assessment in the form 

75 T. T. Kotenev, Shanghai: Its Municipality; and Shanghai: Its Mixed Court 
and Council (Shanghai); Hsia, op. cit.; H. B. Morse, Trade and Administration 
of China; Willoughby, op. cit.; Manley O. Hudson, "International Problems at 
Shanghai," Foreign Affairs, October, 1927. 

76 Manley Hudson says the Taot'ai agreed to them under the pressure of the 
disturbed conditions then existing in China. Other authorities agree with him, but 
Willoughby, op. cit., I, 513, says they were not so submitted. 


of a rate to be made on land and buildings, and in the form of wharf- 
age dues on all goods landed at any place within the said limits ; and 
to appoint a committee of three or more persons to levy the said 
rates and dues and apply the funds so realized to the purposes afore- 
said. . . . The committee shall be empowered to sue all defaulters in 
the consular courts under whose jurisdiction they may be. ... 

Thus was delegated to the governing body of the settlement, com- 
ments Hsia, the highest powers in all government, those of taxing 
and policing the community, though there was a definite acknowl- 
edgment of Chinese sovereignty. An annual land tax was to be 
paid to the Chinese Government. 

At this time it was the intention that the entire body of foreign 
residents assembled on that part of Chinese soil should combine to 
form one body politic, administered without regard to nationality. 
But international jealousies proved too powerful, and as residents 
began gradually to settle within the so-called French and Ameri- 
can areas, the consuls of these nations supported a resolution to 
start a separate administration for each settlement. The conse- 
quence of this independent action was that while the British settle- 
ment, which comprised nine-tenths of the wealth, population, and 
trade, was comparatively well laid out, drained, and guarded, the 
settlements on each side remained for years in a condition of 
primitive wildness and insecurity. Not until the events of later 
years brought a large Chinese population within the elastic limits 
of the French settlement was its Municipal Council placed in pos- 
session of funds enabling it to carry out adequate works of drain- 
ing and road making. 

The French settlement remains to this day a separate adminis- 
trative area, but the American settlement (as a separate adminis- 
trative area) lasted only from June to October, 1863. After this 
brief period of independence a "committee on roads" recom- 
mended that the management of the American settlement be taken 
over by "the existing municipal council on the English Conces- 
sion," and then by action of the local consuls it was merged with 
the British settlement. No record is known which shows that the 
consul's original action was sanctioned by the United States Gov- 


ernment. 77 For many years the enlarged area was called "the 
English and American Settlements." 

A growing desire to be free of constant reference to the diplo- 
matic body in Peking gave rise to a proposal to establish a Free 
City of Shanghai under the Powers' protection, but this was aban- 
doned, and instead a third set of land regulations was issued in 
1869. If they could not have their free city, the land renters must 
have more authority. The regulations did not obtain the previ- 
ous approval of the Chinese authorities but were provisionally 
agreed to by the diplomatic corps. Apparently, however, there 
was still not enough elasticity to suit Shanghai, and in 1898 a final 
set of regulations which had been in delayed preparation for fif- 
teen years was approved by the ministers of eleven Powers. These 
were sent to the Tsung-li-Yamen (the Foreign Office under the 
monarchy), but the Yamen never replied; the Viceroy declared 
through the Taot'ai that the land regulations were not of inter- 
est to him, but "should be satisfactorily arranged between the 
Municipal Council and the Consular Body." In May, 1899, he 
declared that, except for certain temples and properties used by 
the Chinese Government, "the entire area of the International 
Settlement shall be within municipal control," and that the exist- 
ing regulations shall operate and must be obeyed. In all of the 
foregoing, however limited and inferential the acquiescence of the 
Imperial Government, at least there does not appear to be any 
protest or objection on the part of the responsible Chinese au- 
thorities. On the other hand, it would be hard to find in the realm 
of political experience a situation in which an enclave has been 
carved out of sovereign territory as a result of provisions for resi- 
dence and trade or the parallel of an evolution by which land 
regulations have become a code of municipal government. 

Contact between Chinese and Foreigners. 

The relations between the Chinese and foreigners in Shanghai 
have not been happy. On the Chinese side the old resentment 
against the foreigner has been combined with a nationalist hos- 
tility to the treaties giving him a privileged position. Inevitably 

77 Hudson, op. cit. f p. 78. 


the seed of nationalism found its most fertile soil in such places as 
Shanghai among Chinese many of whom had been educated 
abroad or in missionary colleges in China and all of whom had 
been inoculated with foreign ideas. They were little affected by 
the argument that there was no representation in the cities under 
Chinese administration. Inevitably also the strains of relations 
between different races were soonest felt in the busy metropolis. 
At its mildest the attitude expressed itself in occasional requests 
for representation on the Municipal Council; at its bitterest, in 
demands for retrocession. The foreigners furnished an antithesis 
to the Chinese attitude in their own deliberate effort to maintain 
the ways of living, club life, sports, comforts, and luxuries of a 
Euro-American community, from most of which amenities they 
excluded the Chinese. No Chinese, for example, were allowed in 
either the clubs or the parks. Long separation from home and 
constant practice of half-bullying Chinese underlings combined 
to produce a sense of complacent superiority which the "griffin" 
fresh from home quickly acquired and cultivated in his dealings 
with the Chinese. The so-called "Shanghai mind 55 is after all 
merely another illustration of that Spencerian principle of 
segregation which seeks to prove that the response to a new en- 
vironment inevitably produces a new type which becomes increas- 
ingly divorced from its pristine influences. Professor Toynbee 78 
likens it to the attitude displayed in 1908 and the following years 
by the British communities in Constantinople and Smyrna toward 
the new Turkish efforts and aspirations, an attitude which "had 
caused the would-be Turkish reformers to turn to the Germans 
and so had partly paved the way for the intervention of Turkey 
in the General War of 191418 on the side of the Central 
Powers." In Shanghai no effort was made to copy the example 
of the British Concession at Tientsin and admit Chinese to repre- 
sentation, and foreign life proceeded en joy ably from counting 
house to club and from club to race course or country club un- 
perturbed by the political undercurrents among the teeming na- 
tive population. Ratepayers' meetings went unattended and the 
multitudinous affairs of the Municipal Council were left in the 

78 Op. cit. f 1926, p. 242. 


hands of a ramified, capable, and honest bureaucracy, of which the 
municipal departments are under British management, and nine- 
tenths of the employees, excluding the police force, are British. 

The Incident of 192 5. 

No serious troubles within the Settlement were encountered un- 
til 1925. Early in that year forty Chinese employees at a Japa- 
nese mill were dismissed, of whom six were prosecuted and im- 
prisoned. A strike of over thirty thousand Chinese workers in 
Japanese mills followed, with the accompaniment of intimidation 
and sabotage, which developed into an attack on a mill in which a 
manager was killed and another seriously wounded. Another simi- 
lar attempt was resisted by the Japanese employees of a mill who 
in self-defense killed one of the strikers. The Chinese students 
thereupon took up the cause of the workers, and in the Interna- 
tional Settlement on May 30 made a demonstration which, of 
course, collected a mob. The crowd threatened the Louza police 
station where arms were kept, until the inspector in charge, fear- 
ing a rush but not waiting for it, ordered the police to fire ; as a 
result, twelve rioters were killed and seventeen more wounded. 
The police head of the International Settlement was absent at the 
races, although he had had notice of the brewing trouble. 

On June 3, the Chinese Foreign Office in Peking presented to 
the diplomatic corps a note expressing "the most solemn protest 
. . . for this deplorable incident, for which the authorities of the 
International Settlement are solely responsible." The diplomatic 
corps replied the next day, stating that "the crowd, which re- 
fused to obey the orders of the police, then attacked them and at- 
tempted an assault on the police station. ... It would therefore 
result that the responsibility of the events which followed rests on 
the demonstrators and not on the authorities of the concession. 5579 

On June 6, the interested Powers decided to send a diplomatic 
commission from Peking to Shanghai. This commission, composed 
of representatives of six of the legations in Peking, including that 
of the United States, left Peking June 8 and reached Shanghai 
June 10. After investigating the situation, it entered into negotia- 

79 China Year Book, 1926-27, for diplomatic correspondence. 


tions with a Chinese commission composed of two representatives 
of the Peking government. The Chinese commission presented 
thirteen demands which had originally been drawn up by the Chi- 
nese Chamber of Commerce in Shanghai. These included five de- 
mands relating to the May 30 affair (apology, compensation, 
punishment of offenders, etc.) and six demands which related to 
the general situation in the International Settlement (rendition 
of the Mixed Court, better conditions for laborers, Chinese to have 
the right to vote and hold office, Chinese to have liberty of speech 
and assembly, etc.). The commission from the legations proposed 
a settlement of the consequences of the May 30 incident but were 
unwilling to consider the problems created by the general situa- 
tion, such as those of the franchise and the Mixed Court, and since 
the Chinese delegation was unwilling to treat on the events of May 
30 alone, the commission from the legations on June 18 returned 
to Peking. 

On June 24, the Peking government sent to the diplomatic 
corps the thirteen demands presented by the Chinese delegates ; to 
these, on October 1, the Senior Minister of the diplomatic corps, 
in a note addressed to the Chinese Minister of Foreign Affairs, re- 
plied in effect that the Powers had already done everything rea- 
sonable to settle the May 30 affair and were ready to continue 
negotiations on the unsettled issues. "All military measures have 
been abolished, naval detachments re-embarked, the Volunteer 
Corps demobilized and the measures of security withdrawn." The 
diplomatic representatives of the Powers, he said, 

are ready to conduct with you to a successful termination, negotia- 
tions concerning rendition of the Mixed Court, which were begun 
some time ago, and they are seriously studying the most practical 
manner for obtaining the co-operation of the Chinese and foreign in- 
habitants in the work of the municipal administration of Shang- 
hai. 80 

The Municipal Council on December 21, 1925, sent a check for 
$75,000 (silver), "as a compassionate grant," to the Senior Con- 
sul in Shanghai, to be given to those who suffered from this inci- 

so China Year Book, 1926-27, pp. 935-936. 


dent, but the Chinese Foreign Office ordered that it be returned. 
Recently the amount was increased to $150,000, and was accepted 
by the Shanghai Chinese. 

The incident was the first of a series of clashes with the for- 
eigner which bore the Chinese Nationalist movement along to vic- 
tory. So dangerous to the safety of the Settlement did the British 
Government consider the Nationalist excesses at Hankow and 
other Yangtze cities that in January, 1927, it ordered the dis- 
patch of a defense force of three infantry brigades. Both the Pe- 
king and Nationalist governments protested vigorously. On Feb- 
ruary 4, the United States Minister at Peking communicated an 
identic message to the Chinese contestants in which he recalled 
that it had 

been the uniform policy of the foreign residents of the International 
Settlement and of their Governments to keep the Settlement aloof 
from [Chinese] factional disturbances and, as far as this could be 
accomplished, rigorously to prevent it from being utilized by any 
faction. . . . 

In recalling these facts to the Chinese military commanders, the 
American Government is confident that they will lend their sincere 
support to the proposal now made that the International Settle- 
ment at Shanghai be excluded from the area of armed conflict so that 
American citizens and other foreigners may receive adequate protec- 
tion. The American Government will be ready for its part to become 
a party to friendly and orderly negotiations properly instituted and 
conducted regarding the future status of the Settlement. 81 

On February 11, 250 United States marines from Manila were 
landed in the International Settlement. The Nationalists, who 
were having the better of the battle with the northerners, gradu- 
ally drew around Shanghai, and, in view of several incidents that 
occurred in the vicinity, the diplomatic corps on February 25 is- 
sued a declaration of Shanghai's neutrality and called on the Chi- 
nese to observe it. The same day British troops were moved out to 
form a cordon round the Settlement, and, in spite of a good deal 
of hesitation and confusion, "arrangements for concerted action 
by the British, French, and American forces, in case the emer- 

si United States Daily, February 7, 192T. 


gency arose, seem to have been arrived at." 82 At the same time, 
from Washington it was reported "on behalf of President 
Coolidge that as American forces in China were there solely to 
protect our nationals there was no present intention to place them 
under a uniform command with other foreign forces." 88 

When the Nationalists at length took over the Chinese area 
around Shanghai, there were several brushes between the troops 
guarding the settlement and fleeing soldiery, but, though there 
was some bloodshed, the trouble died down after the Nationalists 
had consolidated their gains. That the fear of the British Govern- 
ment had been justified seems to be indicated by a message of 
thanks "for the prompt and adequate measures taken for the de- 
fence" of the International Settlement which was sent to the Brit- 
ish Government by 3,000 foreign residents representing more 
than thirty- two nationalities. 

Organization of the Settlement. 

One of the results of the Nationalist agitation against foreign 
privileges was the opening to the Chinese of the portals of the 
Municipal Council. 84 Among the foreign residents, land renters 
and ratepayers of the higher grade are eligible to be members of 
the Municipal Council, and those of a lower grade, while not eli- 
gible to be members, are electors or voters. Other foreigners enjoy 
the privileges of renters but not the voting right. In 1925 there 
were 2742 ratepayers 1157 British, 552 Japanese, 328 Ameri- 
can and in 1927, 2368 ratepayers out of the foreign population 
of nearly 35,000. Up to 1928, the Council consisted of nine mem- 
bers, of whom five were British, two Americans, and two Japanese, 
with no Chinese. In March, 1928, after some years of negotiations 
concerning Chinese membership, an arrangement was made for 
the election of three Chinese to the Council, and six additional 
Chinese as advisers. The Chinese desired an increase of member- 
ship to five, with an enlargement of the total membership of the 
Council to fourteen. The ratepayers of the Settlement at their 

82 Toynbee, op. cit. } 1927, p. 3TO. SB New York Times, May 30, 1927. 

84 Another was an alteration in the status of the Mixed Court in Shanghai. See 
pp. 189-193. 


annual meeting of April 16, 1930, rejected a motion for these 
changes notwithstanding the fact that the China Taxpayers As- 
sociation had been led to believe that the proposal would be 
adopted and had nominated two additional representatives to the 
Council. But the action of the meeting was reversed by the unani- 
mous vote of a meeting of May 2, 1930, and henceforth, there- 
fore, the Chinese membership will be five to the British six, with 
one American and two Japanese. 85 

In 1929, Sterling Fessenden, an American, who had been the 
chairman of the Council since 1923, was appointed director-gen- 
eral. His appointment was part of the program for renovating 
the administration in accord with the new spirit of cooperation 
with the Chinese which has also manifested itself in closer social 
relations. That Shanghai had begun to think in terms of the fu- 
ture rather than of the present was also indicated by the appoint- 
ment in the same year of Judge Richard Feetham, of the Supreme 
Court of South Africa, who has had much experience in dealing 
with difficult situations involving conflicting interests of divergent 
racial groups, to be expert adviser on municipal problems. The 
Municipal Council has become apprehensive of the possible results 
of the abolition of extraterritoriality upon the Government of the 
International Settlement, and has given Judge Feetham the task, 
as he defines it, of "the formulation of some constructive plan or 
scheme which, while giving full consideration to the aspirations of 
the Chinese people, will at the same time afford reasonably ade- 
quate protection to the great commercial and business interests 
which have been developed in Shanghai." 

On December 23, 1929, Dr. C. T. Wang, the Chinese Minister 
of Foreign Affairs, stated that for the year 1930, the Ministry's 
task would be to concentrate on the abolition of foreign inland 
navigation rights in China, the withdrawal of foreign troops, and 
the restoration of foreign concessions and settlements in China. 
Undoubtedly the haste of the modern Chinese is due to past pro- 
crastination. It may well be that in view of the sincerity with 
which the Powers are at length meeting Chinese aspirations, a 
sense of Realpolitik will return to China, in place of the "religion 

85 The China Digest (Shanghai), May 10, 1930. 


of the slogan" against which Hu Shih inveighs. Shanghai, after 
all, is the heart of the whole system by which a great part of China 
exchanges its products with the rest of the world. By stopping 
that heart the trade of China would be paralyzed. As long as the 
rest of China is a political quicksand, Shanghai is the only finan- 
cial anchorage for the Government against the rapacity of con- 
tending armies, and it is significant that the Central Bank of 
China keeps the Government's silver reserves in the International 

The Treaty Terms. 

The United States, Great Britain, France, Japan, and eleven 
other Powers have treaties with China which remove their na- 
tionals from the jurisdiction of the Chinese courts and subject 
them to the control of their own consuls or national courts estab- 
lished in China, for trial under their own national laws. 

The system was created by the General Regulations of Trade 
of 1843 which supplemented the Sino-British Treaty of Nanking 
of 1842. The extraterritorial privileges were extended to other 
states, mainly through the operation of "most-favored-nation 
clauses." The principle was skilfully defined by Caleb Gushing in 
the Sino-American Treaty of Wanghia of 1844. 86 Gushing based 
his plan on the system of "capitulations" granting extraterri- 
torial rights to Christians in the Mohammedan countries of the 
Levant, 87 where it had existed for some five centuries. 88 

To the Manchu authorities who had bitterly resisted the trade 

86 Any national accused of a criminal offense toward a national of the other 
country was to be tried by the laws of his own country. A civil claim must be 
submitted to the claimant's public authority "to determine if the language be 
proper and respectful" and then transmitted. "And if controversies arise be- 
tween citizens of the United States and subjects of China, which cannot be 
amicably settled otherwise, the same shall be examined and decided conformably 
to justice and equity by the public officers of the two nations acting in conjunc- 
tion." (William M. Malloy, Treaties, Conventions, International Acts, Protocols 
and Agreements between the United States and Other Powers, 1776-1909, I, 
202 ff.) In 1880 the Treaty of Peking placed such civil claims under the jurisdic- 
tion of the officials of the nationality of the defendant, and the right to watch the 
proceedings was vested in an official of the plaintiff's nationality. 

87 H. B. Morse, The International Relations of the Chinese Empire, I, 329. 

88 See note on the Capitulatory Regime in Turkey at end of this chapter, pp. 
196 ff. 


assaults of the West, this extraterritorial scheme was not unwel- 
come; once commercial relations had been forced on them it was 
better that the tumultuous and incomprehensible barbarians 
should be remitted to the discipline of their own authorities with 
whom alone would lie the blame for failure to pacify them; be- 
sides, the system could obviously be established in only a few 
places and was therefore the correlative of strict limitation on 
any extension of the treaty-port system. 

The system in general works in the following fashion : 

(1) Cases between Chinese and nationals of treaty powers are de- 
termined by the tribunals of the defendant, and the law of his coun- 
try is applied. 

(2) Cases between two or more nationals of the same treaty 
power are tried in the courts of that power and the law applied is 
that of the power concerned. 

(3) The Chinese police may arrest a foreigner but must promptly 
turn him over to his national representatives for trial. 

(4) Cases between nationals of different treaty powers are de- 
termined by the authorities and laws of the states concerned, accord- 
ing to their agreements. 

(5) Controversies between nationals of non-treaty powers and 
nationals of treaty powers in which the latter are defendants, are 
determined by the authorities of the treaty powers. When the na- 
tional of a non-treaty power is defendant, jurisdiction is in the 
Chinese courts. 

(6) In cases between the nationals of non-treaty powers and in 
cases between such nationals and Chinese, jurisdiction is in the Chi- 
nese courts. 89 

Chinese Objections. 

A system which met the needs of a situation involving a small 
number of contacts became oppressive to the Chinese in propor- 
tion as the contacts increased; their sense of oppression found 
expression in a demand for its abolition long before the rise of 
nationalism. To some extent, the anti-treaty agitation was ac- 
knowledged by the Powers. In the so-called Mackay Treaty of 
September 5, 1902, Great Britain agreed "to relinquish her ex- 

89 See China Weekly Review (Supplement) (Shanghai), June 19, 1926, p. 63. 


traterritorial rights when she is notified that the state of the 
Chinese laws, the arrangements for their administration and 
other considerations warrant her in so doing." 90 The United 
States did likewise in its treaty of 1903. 

Chinese sense of oppression increased greatly with the access of 
political consciousness after the overthrow of the Manclms. The 
entry of China into the War helped its position as far as the ex- 
traterritorial privilege was enjoyed by enemy countries. 

The chief objections to extraterritoriality brought out in the 
Round Table discussion of the Institute of Pacific Relations in 
1927 were the following: 

The system is in derogation of China's sovereign rights ; it tends 
to breed envy, dislike, and even hatred of the foreigner. 

The Chinese feel uncertain of securing justice in certain foreign 

There is a multiplicity of foreign courts and of foreign legal 
codes, giving rise to a widespread perplexity. 

The frequent impossibility of producing at a consular court the 
witnesses needed in the trial of a foreign defendant tends to give the 
foreigner a sense of being outside the law. 

The procedure of appeal to a court in the home territory of the 
"treaty power" is unintelligible to Chinese, and often frustrates jus- 

Foreigners under cover of extraterritoriality claim immunity from 
local taxes. 

Chinese register as foreign citizens in a foreign consulate and 
thereby secure immunity even when defying justice. 

The system protects smuggling at the treaty ports, of which a 
vast amount is carried on both by foreigners and Chinese in opium 
and in such a government monopoly as salt, making it more difficult 
to catch as well as to prosecute offenders. The officials of foreign 
governments whose presence is mainly due to an interest in trade are 
much less likely to be zealous in the enforcement of Chinese law than 
the Chinese themselves. 91 

Steps toward Revision. 

The privileges of Germany and Austria-Hungary were canceled 

90 MacMurray, op. cit. t I, 85. 

91 Problems of the Pacific (1927), op. cit., pp. 89, 90. 


when China declared war against the Central Powers in 1917. The 
loss was recognized by treaty : Germany by express provision of 
the Sino-German agreement of 1921 ; 92 Austria by implication of 
Article 234* of the Treaty of Saint-Germain, 1919, and by express 
provision of the Sino-Austrian Treaty, October 19, 1925 ; 93 and 
Hungary by Article 217 of the Treaty of Trianon, 1920. Russia 
was deprived of its extraterritorial rights in 1920 by decree of the 
Chinese Government, and in the Sino-Soviet agreement of May 
31, 1924, pledged itself to renounce them. The nationals of Aus- 
tria, Germany, Hungary, and Russia are therefore subject to the 
jurisdiction of Chinese courts. In the same situation are the na- 
tionals of most of the Latin- American republics, and of such Eu- 
ropean countries as Czechoslovakia, Estonia, Latvia, Lithuania, 
Poland, Rumania, and the Serb-Croat-Slovene State. 

The Extraterritoriality Commission. 

The Chinese pressed their objections at the Washington Con- 
ference. The Powers there represented, desiring to have authentic 
information concerning the administration of justice in China be- 
fore committing themselves, appointed a commission "to inquire 
into the present practice of extraterritorial jurisdiction in China, 
and into the laws and the judicial system and the methods of judi- 
cial administration of China.' 594 Owing to the disordered condition 
of China, the Chinese requested a delay in the meeting of the Com- 
mission. In January, 1926, the Commission met in Peking under 
the chairmanship of Silas H. Strawn, the American Commis- 
sioner, and continued until its report was drawn up in September. 
The representatives of the thirteen Powers making up the Com- 
mission, Belgium, the British Empire, China, Denmark, France, 
Italy, Japan, the Netherlands, Norway, Portugal, Spain, Swe- 

92 The exchange of notes accompanying the Sino-German agreement of May 20, 
1921, contained the important assurance: "All lawsuits in China in which Germans 
are involved will be decided before the newly-established courts, with right to 
appeal. These lawsuits will be conducted in accordance with the regular procedure. 
German barristers and interpreters, officially accredited to the courts, may act as 
counsel during the proceedings." League of Nations, Treaty Series, IX, 288; 
Hornbeck, op. cit., p. 521. A similar provision is contained in Article IV of the 
Sino-Austrian Treaty of October 19, 1925. 

es League of Nations, Treaty Series, LV, 21 (Article IV). 

94 Conference on the Limitation of Armament, p. 1644. 


den, and the United States, signed the report. The Chinese Com- 
missioner, Wang Chung-hui, Chief Justice of the Supreme Court 
of China, attached to his signature an observation to the effect 
that his approval "of all the statements" contained in the fact- 
finding parts of the report was not to be implied. The Commis- 
sion, naturally employing its own standards which, in the dis- 
orders of the revolutionary period, China had not been able to 
meet, found that the existing traditional system had substantial 
defects which made the immediate abolition of extraterritoriality 
inadvisable : indispensable codes and laws were lacking, as well as 
modern courts and trained judges, and such "laws" as presiden- 
tial proclamations rested upon an uncertain legal basis ; the courts 
had not adequate financial support, nor in other ways were they 
independent or free from interference from executives or military 
commanders, and the magistrate courts and police courts did not 
meet the demands of modern civilization. At the same time the 
Commission praised the efforts made by China in drawing up new 
codes, in establishing a limited number of modern courts and 
prisons, and in investing some specially-trained judges with of- 
fices ; and it expressly recognized the outstanding defects of the 
extraterritorial system substantially as they have been outlined 

The Commission gave its views as to the steps necessary to con- 
form the Chinese judicial system to the minimum essential stand- 
ard, and in Part IV made certain recommendations : 

The commissioners are of the opinion that, when these recommen- 
dations shall have been reasonably complied with, the several powers 
would be warranted in relinquishing their respective rights of extra- 

It is understood that, upon the relinquishment of extraterritori- 
ality, the nationals of the powers concerned will enjoy freedom of 
residence and trade and civil rights in all parts of China in accord- 
ance with the general practice in intercourse among nations and 
upon a fair and equitable basis. 

It is suggested that, prior to the reasonable compliance with all 
the recommendations above mentioned but after the principal items 


thereof have been carried out, the powers concerned, if so desired by 
the Chinese Government, might consider the abolition of extraterri- 
toriality according to such progressive scheme (whether geographi- 
cal, partial, or otherwise) as may be agreed upon. 

Pending the abolition of extraterritoriality, the modifications 
to be made by the Powers "in the existing systems and practice of 
extraterritoriality" would include the following points : 

The powers concerned should administer, so far as practicable, in 
their extraterritorial or consular courts such laws and regulations 
of China as they may deem it proper to adopt. 

As a general rule mixed cases between nationals of the powers con- 
cerned as plaintiffs and persons under Chinese jurisdiction as de- 
fendants should be tried before the modern Chinese courts without 
the presence of a foreign assessor. . . . With regard to the existing 
special mixed courts, their organization and procedure should, as far 
as the special conditions in the settlements and concessions warrant, 
be brought more into accord with the organization and procedure of 
the modern Chinese judicial system. . . . 

The extraterritorial powers should correct certain abuses which 
have arisen through the extension of foreign protection to Chinese as 
well as to business and shipping interests the actual ownership of 
which is wholly or mainly Chinese. . . . [And should] require com- 
pulsory periodical registration of their nationals in China. . . . 

Pending the abolition of extraterritoriality, the nationals of the 
powers concerned should be required to pay such taxes as may be 
prescribed in laws and regulations duly promulgated by the compe- 
tent authorities of the Chinese Government and recognized by the 
powers concerned as applicable to their nationals. 95 

After publication of the Strawn Report a new criminal code 
was promulgated on March 10, 1928, and a new code of criminal 
procedure on July 28, 1928 ; the new civil and commercial codes 
under the draftsmanship of the Legislative Yuan, according to 
the promise of the Nanking government, were to be promulgated 
before January 1, 1930. The modern courts, of which there were 

95 Report of the Commission on Extraterritoriality in China, Peking, September 
16, 1926. Washington Government Printing Office. Recommendations, pp. 107-109; 
for the declaration of the Chinese commissioner, see China Year Book, 1928, pp. 


140 in 1926, were increased to 350 and the modern prisons from 
seventy-four to eighty-three. Plans were also laid for the improve- 
ment of legal education and for taking judicial authority from 
the local magistrates and transferring it to trained jurists. 

Negotiations with the Powers. 

In 1928 the Chinese Government negotiated treaties with Bel- 
gium, Denmark, Italy, Portugal, and Spain bearing on extra- 
territoriality. Article II of these treaties declares : 

The nationals of each of the two high contracting parties shall be 
subject, in the territory of the other party, to the laws and jurisdic- 
tion of the law courts of that party, to which they shall have free 
and easy access for the enforcement and defense of their rights. 

But Annex I of the treaties, consisting of an exchange of notes, 
provides that the above article 

shall be understood to be operative on January 1, 1930. Before such 
date the Chinese Government will make detailed arrangements with 
the Italian Government for the assumption by China of jurisdiction 
over Italian subjects. Failing such arrangements on the said date, 
Italian subjects shall be amenable to Chinese laws and jurisdiction 
from a date to be fixed by China, after having come to an agreement 
for the abolition of extraterritoriality with all the powers signatory 
of the Washington treaties, it being understood that* such a date 
shall be applicable to all such powers. 

By "powers signatory of the Washington treaties" shall be meant 
those powers, other than China, which directly participated in the 
discussion of Pacific and Far Eastern questions in the Conference on 
the Limitation of Armament held in Washington in 19211922. 

The Belgian Treaty words the condition: "Belgian subjects 
shall hereafter be amenable to Chinese laws and jurisdiction as 
soon as the majority of the powers now possessing extraterritorial 
privileges in China shall have agreed to relinquish them." 

In additional annexes, China agrees "that on or before January 
1, 1930, the Civil Code and the Commercial Code, in addition to 
other codes and laws now in force, will be duly promulgated by 
the National Government of the Republic of China" ; and the five 


Powers agree that their citizens in Chinese territory "shall here- 
after pay such taxes or imposts as may be prescribed in the laws 
and regulations duly promulgated, provided that such taxes or 
imposts are not other or higher than those paid by the nationals 
of any other country." 96 China makes in addition the declaration 
that, after the abolition of extraterritoriality and other similar 
privileges, the nationals of these five countries, on the basis of reci- 
procity, shall "enjoy the right to live and trade and to acquire 
property in any part of ... China, subject to the limitations to 
be prescribed in its laws and regulations." The correlation be- 
tween extraterritoriality and limitation of residence and travel is 
thus freely recognized. 

Dr. C. T. Wang, Minister of Foreign Affairs, then addressed 
himself to the Ministers of the United States, Great Britain, 
France, Brazil, the Netherlands, and Norway. Identic notes dated 
April 27, 1929, were presented to the three great Powers, basing 
the desire of the Chinese Government for the abolition of extra- 
territorial privileges on the "detriment to the smooth working of 
the judicial and administrative machinery of China" done by the 
legacy of this old machine, on "the assimilation of western legal 
conceptions by Chinese jurists and incorporation of western legal 
principles in Chinese jurisprudence," on the preparation of mod- 
ern codes, on the establishment of modern courts and prisons, and 
on the fact "that certain countries, having ceased to enjoy extra- 
territorial privileges in China, have found satisfaction in the pro- 
tection given to their nationals by Chinese law and have had no 
cause for complaint that their interests have been in any way 
prejudiced." 97 

The United States reply, dated August 10, 1929, after ex- 
pressing the sympathy of the Government for the aspirations of 
the Chinese people, repeating the familiar explanation of the rise 
of extraterritoriality, and pointing out the fact that the United 
States had never abused its extraterritorial privileges, stated that 
the Government was persuaded 

06 Wording of the Danish, Portuguese, and Spanish treaties. 
97 Chinese Social and Political Science Review, Public Documents Supplement 
(Peking), July, 1929, XIII, 64; Current History, June, 1929, pp. 538-539. 


that the sudden abolition of the system of protection by its extra- 
territorial courts in the face of conditions prevailing in China today 
would in effect expose the property of American citizens to danger of 
unlawful seizure and place in jeopardy the liberty of the persons of 
American citizens. 

After referring to the recommendations in the Strawn Report 
of the reforms which China would have to make before extraterri- 
toriality could properly be relinquished, the note pointed out 

that the recommendations aforesaid have not been substantially car- 
ried out, and that there does not exist in China today a system of in- 
dependent Chinese courts free from extraneous influence which is 
capable of adequately doing justice between Chinese and foreign liti- 
gants. My Government believes that not until these recommendations 
are fulfilled in far greater measure than is the case today will it be 
possible for American citizens safely to live and do business in China 
and for their property adequately to be protected without the inter- 
vention of the consular courts. 

The note closed hopefully with the suggestion that the United 
States Government would be ready to join 

in negotiations which would have as their object the devising of a 
method for the gradual relinquishment of extraterritorial rights ei- 
ther as to designated territorial areas or as to particular kinds of 
jurisdiction, or as to both, provided that such gradual relinquish- 
ment proceeds at the same time as steps are taken and improvements 
are achieved by the Chinese Government in the enactment and effec- 
tive enforcement of laws based on modern concepts of jurisprudence. 

The British note of August 10 observed that the promulgation 
of codes embodying western legal principles represented only a 
part of the task to be accomplished : 

In order that those reforms should become a living reality it ap- 
pears to His Majesty's Government to be necessary that Western 
legal principles should be understood and be found acceptable by the 
people at large no less than by their rulers and that the Courts which 
administer these laws should be free from interference and dictation 
at the hands not only of military chiefs but of groups and associa- 
tions who either set up arbitrary and illegal tribunals of their own or 


attempt to use legal courts for the furtherance of political objects 
rather than for the administration of equal justice between Chinese 
and Chinese and between Chinese and foreigners. 

The general tenor of the replies of the Governments of France, 
the Netherlands, and Norway was similar to that of the American 
note, though none of these Governments gave such a definite 
promise as did the United States, namely, that it was ready to ne- 
gotiate for the gradual relinquishment of extraterritorial rights. 
Great Britain and France spoke of the possibility of modifying 
the existing extraterritoriality status and practice. 98 

China did not approach Japan in these diplomatic exchanges, 
treating the Sino- Japanese Treaty of July 21, 1896, on which ex- 
traterritoriality rested, as having lapsed." It may be observed in 
regard to the Japanese position that Japan might be willing to 
quitclaim extraterritoriality for the privilege of leasing land in all 
parts of China, asserting the correlation between extraterritori- 
ality and the restriction of residence and leasing to the treaty 
ports. To the Japanese the unrestricted privilege of leasing would 
be of great value. 

In rejoinder to the Powers 5 notes, Dr. Wang argued that since 
the Report of the Commission on Extraterritoriality "conditions 
in China have greatly changed, and in particular, both the politi- 
cal and judicial systems have assumed a new aspect." He referred 
to the renunciation by the United States Government 100 of its 
rights in Turkey under the Capitulations, with the statement that 
the United States Government "has had the satisfaction to find 
that the life and property of American citizens in Turkey have 
subsequently received full and adequate protection." He added 
the inaccurate statement "that the Chinese Government has re- 
cently concluded treaties with several other Powers which have 
agreed to relinquish extraterritorial privileges on January 1st, 
1930." The chief contention of the note was that American life 
and property would be safer without extraterritoriality than with 

98 These notes were all signed August 10, with the exception of the Norwegian 
note, which was signed August 14. (Chinese Social and Political Science Review, 
October, 1929.) 

99 See pp. 146-147. 

100 The Treaty of Lausanne, however, has not been approved by the Senate. 


it, since the protection of Chinese confidence and friendly good- 
will would be worth more than consular jurisdiction ; and that as 
long as extraterritoriality continued the Chinese people would 
doubtless favor the foreign Powers which had relinquished the 
system. In conclusion Dr. Wang asked the United States Govern- 
ment to "enter into immediate discussions . . . whereby extrater- 
ritoriality in China will be abolished to the mutual satisfaction of 
both Governments. 55101 

This dialectic series came to an end with a brief note of the 
United States Minister, dated November 1, 1929, stating that the 
United States had gone into the situation sufficiently in its note of 
August 10, "although it seems to my Government not superfluous 
to draw the attention of the Chinese Government to the fact that 
certain events of the past few months cannot but strengthen the 
opinion that the legal and physical safeguarding of property and 
of life in China still leaves very much to be desired. 55 The note re- 
affirms, by direct quotation, the promise given in the note of Au- 
gust 10, to enter into negotiations for the gradual relinquishment 
of extraterritoriality, if China is willing to do so. It is significant 
of the attitude of the more popular branch of Congress that on 
December 30, 1929, Congressman Porter, Chairman of the House 
Committee on Foreign Affairs, stated that the purpose of the 
United States to give up extraterritoriality was evident from the 
fact that the plans for the new American consular building in 
Shanghai had no provision for quarters for an extraterritorial 

The British Government, in an Aide Memoir e, December 20, 
1929, handed to the Chinese Minister in London, referred to the 
importance attached by the Chinese Government to the date, 
January 1, 1930, and stated that the British Government had 
hoped that Sir Miles Lampson might have proceeded to Nanking 
and initiated negotiations on extraterritoriality before January 
1, 1930. The civil war in China had made it impossible to carry 
out this intention. After stating that "a gradual and progressive 
solution of the problem of extraterritoriality such as is contem- 

101 Chinese Social and Political Science Review, October, 1929. 


plated by both Governments" would involve "intricate readjust- 
ments," the Aide Memoir e said: 

His Majesty's Government are, therefore, willing to agree that 
January 1, 1930, should be treated as the date from which the proc- 
ess of the gradual abolition of extraterritoriality should be regarded 
as having commenced in principle. His Majesty's Government are 
ready to enter into detailed negotiations, as soon as political condi- 
tions in China render it possible to do so, with a view to agreeing on 
a method and a program for carrying abolition of extraterritoriality 
into effect by gradual and progressive stages. 102 

The Chinese Attempt To Expedite Action. 

The State Council of the Nanking government on December 
29, 1929, issued a mandate announcing: 

For the purpose of restoring her jurisdictional sovereignty, it is 
hereby decided and declared that on and after (January 1, 1930) all 
foreign nationals in the territory of China who are now enjoying ex- 
traterritorial privileges shall abide by the laws, ordinances, and 
regulations duly promulgated by the central and local governments 
in China. 

The Executive Yuan and the Judicial Yuan are hereby ordered to 
instruct the ministers concerned to prepare as soon as possible a plan 
for the execution of this mandate and to submit it to the Legislative 
Yuan for examination and deliberation with a view to its promulga- 
tion and enforcement. 103 

Forthwith the Chinese Minister of Foreign Affairs distributed 
to the various legations a manifesto which declared that 

the year 1930 is the decisive time, and the actual process of reestab- 
lishing Chinese sovereignty by the abolition of extraterritoriality be- 
gins on January 1st. 

The Chinese Government . . . believes that there is no difference 
of opinion between those Powers and China regarding the principle 
involved ; and is prepared to consider and discuss within a reasonable 
time any representations made with reference to the plan now under 
preparation in Nanking. 104 

102 London Times, January 1, 1930. 

103 Week in China (Peking), January 4, 1930. 10* Ibid. 


The mandate was widely heralded as constituting the ending of 
extraterritoriality on January 1, 1930; its natural interpreta- 
tion, however, supplemented by the manifesto, is no more than 
that the Chinese Government desires to abolish extraterritoriality 
in name or in principle, and seeks to do so by a legal process ; it 
has not yet issued the necessary laws or regulations to enforce 

In the United States the declaration of the Chinese Government 
aroused much comment. "Regardless of the interests involved," 
said the New York Times of December 30, "no self-respecting na- 
tion can accept the one-sided abrogation of a treaty without ad- 
mitting the principle that treaties have no sanctity and may be 
denounced in part or in whole whenever it is to the convenience 
of one of the parties to do so." The New York World of December 
31, 1929, shrugged its shoulders: 

It is difficult to see what our own government . . . can do about 
it. ... We can point out . . . that China would be wiser in her own 
interest to end the system of extraterritoriality gradually rather 
than to end it in a rush. . . . But beyond filing a protest against 
abrupt action, taken against our advice and will, there is nothing we 
can do. 

More critical of China was the comment of the New York Herald- 
Tribime of December 29, which stated: "With all goodwill for 
China we cannot submit to an abrupt, unilateral closing of courts 
whose jurisdiction is due not to Chinese law, but to an interna- 
tional agreement." No announcement issued from Washington, 
but the State Department appeared to regard the Nanking decla- 
ration in the light of a statement of policy and held that treaty 
provisions now in force, the result of mutual agreement, could 
be altered only by mutual agreement, and that the status of 
Americans in China would remain unchanged until agreements 
for alteration of their status were reached. 105 This was confirmed 
by the United States consuls in China in a circular issued to 
United States citizens 106 stating that the United States Govern- 

105 United States Department of Commerce ; China Monthly Trade Report, 
February 1, 1930. 

ICG New York Times, May 25, 1930. 


ment did not consider that the rights of Americans had been al- 

Provisional Court at Shanghai. 

Social offenses which seem of grave moment to a European may 
be venial in the eyes of a Chinese, and the converse of course is 
true. Furthermore, the rule that a Chinese accused of a criminal 
offense in one of the foreign settlements in China should be tried 
by a Chinese court left no room for the principle that a crime 
raises a general social question, for the Chinese court was indiffer- 
ent to foreign social standards. In Shanghai, therefore, the Brit- 
ish settlement, the most important of the settlements, as early 
as the middle of the nineteenth century, was pressing for a 
system under which a Chinese court should take account of for- 
eign interests. On May 1, 1864, a court was opened at the British 
consulate with a mandarin as judge and a British vice-consul as 
assessor. The constitution of the court seems to have been vague, 
though it was approved by the Taot'ai. In 1869 ten rules of this 
court were promulgated by the British consul after they had been 
presented to the foreign ministers and to the Tsung-li-Yamen 
(Ministry of Foreign Affairs), without action by either body. A 
Sino-British treaty of 1876 known as the Chef oo Convention men- 
tioned the establishment of this mixed court at Shanghai, as well 
as the British Supreme Court at Shanghai, referring to the duty 
of the official of the plaintiff's nationality as that of "merely at- 
tending to watch the proceedings in the interests of justice." The 
results of the operation of this court were so unsatisfactory that 
during the period 19001911, when the old regime was in dissolu- 
tion, the foreign assessors acquired practical control both of pro- 
cedure and judgment. The judges were still Chinese, but they 
served under the authority of the assessors, and the Mixed Court 
functioned after 1911 without treaty sanction. 

Chinese revolutionary opinion was jealous of anything which 
diminished sovereignty. While there is no rule of prescription in 
international law, long practice based on oral understanding or on 
acquiescence through failure to object to notorious facts might be 
urged by the foreigners as evidence of an international agreement 


under which the increased powers of the foreign assessors would 
come to have the standing of a treaty right. Chinese pressure was 
greatly heightened by the Shanghai incident of May, 1925. The 
British, as part of their conciliatory attitude after this incident, 
made proposals for a change in the situation and these proposals 
were substantially those adopted. A three-year agreement coming 
into effect February 1, 1927, was made between the Shanghai con- 
sular body and the Kiangsu provincial government. The court was 
termed the Shanghai Provisional Court, and was under control of 
Kiangsu province, although in cases in which an extraterritorial 
foreigner was plaintiff or complainant, the consul of such for- 
eigner might send an official "to sit jointly" with the judge in ac- 
cordance with treaties ; and in cases which affected the peace and 
order of the International Settlement, the senior consul might ap- 
point a deputy to watch the proceedings. Within this three-year 
period it was stipulated that the Chinese Central Government and 
the foreign ministers might negotiate for a final settlement. 

After the Court was brought under Chinese authority it was 
severely criticized by many of the foreigners in Shanghai on the 
ground that the judges were under political influence and that 
judicial standards were not sufficiently high. There was also said 
to be an unfortunate division between the Chinese judges and Chi- 
nese lawyers on one side, and the foreign delegates, municipal 
police, and the registrar of the Court on the other. 

Toward the end of the three-year period correspondence ensued 
between Minister C. T. Wang and the United States, British, 
French, Dutch, Brazilian, and Norwegian diplomatic representa- 
tives for a solution of the problem presented by the Provisional 
Court. 107 After some months of conversations and formal negotia- 
tion between Chinese officials and representatives of several of the 
foreign legations, an agreement was signed February 17, 1930 
(to go into effect April 1, 1930), by a representative of the Chi- 
nese Minister of Foreign Affairs, and representatives of the 

107 During this correspondence the Chambers of Commerce of the International 
Settlement, in urging their respective home governments not to relinquish their 
extraterritorial rights, pleaded for the creation of a municipal court under the 
control of the Municipal Council with jurisdiction over civil and criminal suits 
arising within the International Settlement. 


United States, Brazilian, British, Dutch, and Norwegian lega- 
tions : The Provisional Court is abolished, and two Chinese courts, 
a District Court and a Branch High Court are created in the Inter- 
national Settlement, with appeal to the Supreme Court of China. 
The jurisdiction although this is stated in the agreement only 
indirectly is limited to cases, either civil or criminal, in which 
Chinese or nonextraterritoriality foreigners are defendants. Ap- 
peals from decisions of the Branch High Court lie to the Supreme 
Court of China. The former privileges of foreign officials are 
greatly curtailed. No consular deputy or official is to be permitted 
"to appear to watch proceedings or to sit jointly in the Chinese 
Court." Foreign lawyers may practice only in cases in which for- 
eigners are parties, and then only on behalf of the foreigners. The 
Municipal Council may also be represented by lawyers in cases in 
which the Council is complainant or plaintiff "or the Municipal 
Police is the prosecutor." In other cases where the Council con- 
siders the interests of the Settlement are involved, it may be repre- 
sented by a consul, "who may submit to the Court his views in writ- 
ing during the proceedings and who may, if he deems necessary, 
file a petition in intervention. ..." All Chinese laws, either now 
in force or later promulgated, shall be applicable in the new 
courts, "due account being taken of the Land Regulations and 
By-laws of the International Settlement, which are applicable 
pending their adoption and promulgation by the Chinese Govern- 
ment." Asylum appears to be abolished; if any other modern law 
court in China issues a request for a person (Chinese or nonextra- 
territoriality foreigner, of course), "the accused may be handed 
over after his identity has been established by the Court" ; in other 
cases (where the request comes from other than the modern Chi- 
nese Courts), there shall be a preliminary investigation in court. 
The Judicial Police of the courts are to be appointed by the Presi- 
dent of the Court, upon the recommendation of the Municipal 
Council, but the Council shall, so far as practicable, recommend 
Chinese. These Judicial Police are subject to the courts. The 
agreement is to continue for three years. 108 

Any case of difference of opinion is to be interpreted by repre- 

108 Text in Pacific Affairs (Honolulu), April, 1930. 


sentatives appointed, two by the Chinese Government, and two by 
the Governments of the other signatory Powers, the report of these 
representatives to have no weight except that of a recommenda- 

Relation of Extraterritoriality to the Settlement Question. 

While the abolition of extraterritoriality would not abrogate 
rights of foreign Powers based on treaties or other agreements of 
international law, e.g., the right to maintain troops or gunboats 
in Chinese territory, the maintenance of international concessions, 
etc., it seems probable that the enjoyment of many of the rights 
created under the settlement status of Shanghai might be com- 
pletely frustrated. If no courts sit in the Settlement except Chi- 
nese courts, executing Chinese laws, the enforcement of settle- 
ment by-laws and tax levies will depend upon the willingness of 
Chinese judges to sustain the powers of the Municipal Council 
to make by-laws, to levy taxes, and to take property by condem- 
nation for public purposes; in these respects, vital to effective 
administration, the Settlement could not function without the 
consent of the Chinese Government. 

Private contracts, concessions and leases would cease to have an 
international character and would become in law subject to interpre- 
tation and application by Chinese courts, apparent grants of juris- 
diction in derogation of Chinese sovereignty would be restrictively 
construed, and diplomatic interposition would become improper until 
local remedies had been exhausted. 109 

Professor Wright points out that in view of the international re- 
sponsibility of China to foreigners damaged by an inadequate 
functioning of its courts, China, as an act of grace, might permit, 
for some time, foreign privileges to continue much as they are at 
present. On the other hand even if extraterritoriality continues 
the authorities of the Settlement will be greatly hampered in ad- 
ministration if China should obtain exclusive control of all the 
Chinese Courts in the Settlement and if the validity of the acts of 

loo Professor Quincy Wright, "Some Legal Consequences if Extraterritoriality 
Is Abolished in China," American Journal of International Law, April, 1930, p. 


the council in their application to an overwhelming number of the 
city's inhabitants should depend on the support of the Chinese 

For such situations Chinese practice affords the traditional so- 
lution of application to the guild or Chamber of Commerce. This 
method was successfully used in the recent controversy between 
the Shanghai Municipal Council and the Chinese ratepayers who 
refused to pay certain increases of taxes ; successful negotiations 
were conducted between the Council and the head of the Chinese 
Chamber of Commerce, and through him with other members. The 
general method of conference settlement is that adopted by the 
Standard Oil Company, British-American Tobacco Company, 
and other concerns whose business is on too large a scale to make 
recourse to the courts desirable. 

Extraterritoriality in Japan. 

The impatience of the Chinese to abolish the extraterritorial 
rights is no greater than was that of the Japanese 110 under similar 
circumstances. In that country the treaties creating extraterri- 
torial privileges were signed between 1850 and 1869. As early as 
1871 the Japanese started a campaign to rid themselves of the 
system, sending the Iwakura mission to Europe and the United 
States to secure treaty revision and to study western institutions. 
They introduced legal reforms and modern codes: in 1882 and 
again in 188687 conferences were held in Tokio. In its efforts to 
obtain reciprocal treaties Japan had the support of a line of United 
States ministers beginning with Townsend Harris, but the Japa- 
nese campaign proved unavailing, because of the cooperative 
policy produced by the treaties which put change under control 
of the slowest mover. So, in 1888 Marquis Okuma, Minister of 
Foreign Affairs, approached the Powers separately. He laid two 
proposals before the British Foreign Office in the form of a draft 
treaty and two draft diplomatic notes. Lord Salisbury prepared 
counter drafts but a combination of circumstances, including an 
attempt to assassinate Count Okuma, prevented the conclusion of 

no For account of treaty revision in Japan see William P. Ker, "Treaty Revi- 
sion in Japan," Pacific Affairs, November, 1928, p. 1. 


the negotiations, and although treaties had been concluded with 
the United States, German, and Russian Governments on the lines 
of Marquis Okuma's proposals, the most-favored-nation clauses 
prevented those treaties from going into effect. 

Negotiations with London were resumed in 1893 and resulted 
in a treaty of July 16, 1894, which determined the jurisdiction 
exercised by the British courts in Japan. The treaty was not to go 
into effect for five years, and then was to remain in force for twelve 
years from the date of its becoming operative. Within the five 
years similar treaties were concluded with the other Powers, and 
revised treaties came into force in July, 1899. The first criminal 
case dealt with by the Japanese authorities was a murder com- 
mitted by a United States sailor on the day when jurisdiction 
passed from the United States to Japan. 

An interesting commentary on the agitation for the abolition 
of extraterritoriality in Japan is that in its treaty with China of 
July 21, 1896, which followed the successful war of 1894-95, 
Japan insisted on retaining its extraterritorial rights in China, 
while at the same time withdrawing the reciprocal privileges en- 
joyed by Chinese in Japan. The mutual recognition of extraterri- 
torial rights by each nation in the territory of the other had up to 
that time been the normal arrangement for intercourse between 
Far Eastern countries, and had been expressly stipulated by a 
treaty between China and Japan signed in 1871. The treaty of 
1896 emphasized the claim of Japan to be treated by China as be- 
longing to the same category as the western Powers. 111 

Extraterritoriality/ in 

The United States took the lead in renouncing extraterritori- 
ality in Siam by a treaty of December 16, 1920. Other states fol- 
lowed this example until, in 1927, extraterritoriality was practi- 
cally abolished, and provision made for its complete abandonment 
within the near future. 

Extraterritoriality was introduced into Siam by the Siamese- 

111 Ker, op. cit., p. 7. 

112 See Francis B. Sayre, "The Passing of Extraterritoriality in Siam," Ameri- 
can Journal of International Law, January, 1928. 


British Treaty of 1855. Other states shortly afterward obtained 
the same rights as the British, so that the extraterritorial system 
was established substantially as in China. It was particularly bur- 
densome for the Government of Siam, since thousands of the Asi- 
atic subjects of extraterritorial Powers (notably of Great Brit- 
ain, France, the Netherlands, and Portugal) were freed in Siam 
from the jurisdiction of Siamese courts and the necessity of obey- 
ing Siamese legislation. 

The first limitation upon the full rights of extraterritoriality 
was made by the British-Siamese Treaty of 1883, which provided 
that in three of the northern provinces of Siam, where there were a 
large number of Asiatic subjects of the British crown, a special 
Siamese court should have jurisdiction over British subjects. 
There were safeguards, notably that the British consul might at 
any time before judgment evoke out of the Siamese court any case 
in which a British subject might be defendant, when it would be 
transferred to the British consular court ; and that appeals might 
lie from this court to Bangkok and then, if the defendant were a 
British subject, the decision on appeal would rest with the British 
Consul General. Under this system few cases were evoked and in 
other ways it was so successful that France adopted similar provi- 
sions in the Franco-Siamese Treaty of 1904. 

A further step was taken by the French treaty of 1907, which 
applied to all French Asiatic subjects within Siam, but not to 
French European citizens or subjects. A British treaty of March 
10, 1909, renounced the general rights of extraterritoriality for 
all British subjects in Siam, both European and Asiatic, under 
various safeguards and guaranties. Those British registered be- 
fore the treaty went into effect were entitled to be tried by the "in- 
ternational courts," under the same conditions and limitations as 
those specified in the French- Siamese Treaty of 1907; in all cases 
in which a British subject should be defendant or accused, 
whether in an "international court" or in an ordinary Siamese 
court, a European legal adviser should sit in the Court of First 
Instance; and in cases in which a British subject not of Asiatic 
descent should be defendant or accused, "the opinion of the ad- 
viser shall prevail." 


After the World War, in which Siam took part on the side of 
the Allied and Associated Powers, the delegates of Siam at the 
Paris Conference appealed to President Wilson for the abroga- 
tion of American extraterritoriality in Siam, and the Siamese- 
American Treaty of December 16, 1920, was accordingly signed 
and ratified. It abolished the right of extraterritoriality, subject 
to the provision that until five years after the promulgation of all 
the Siamese codes of law, the United States, through its diplo- 
matic and consular authorities in Siam, might evoke any case in 
which an American should be defendant, from any Siamese court 
except the Supreme Court, and try the case in its own consular 
court, subject to any Siamese laws then promulgated. No case has 
yet been evoked. 

In 1924 Siam's adviser in foreign affairs, Dr. Francis B. Sayre, 
visiting the European capitals in succession, induced the remain- 
ing Treaty Powers to sign treaties similar in general to the 
Siamese-American Treaty. These treaties were all ratified by 
1927. The work of codifying the remaining codes is in progress. 
The right of evocation will cease altogether five years after the 
promulgation of the codes. 



HISTORICALLY "the Capitulations" 1 granting extraterritorial 
rights to Christians residing or traveling in Mohammedan coun- 
tries are traced back by some ingenious writers to a time preced- 
ing the capture of Constantinople in 1453 by the Turks. However 
far they go back, the system would appear to have its origin in the 
distinction between Mohammedanism, which accepts the Koran as 
the only source of human legislation, and the western system of 
jurisprudence founded on the principles of Roman law and Chris- 
tian ethics. 

i These capitulations are sometimes referred to as the "usages of the Franks," 
for soon after the Treaty of 1535 with the Turks the French took under their pro- 
tection persons of other countries not represented by consuls, and hence the ge- 
neric name of "Franks" was given to all participants in the privilege. It has been 
preserved in the laws, treaties, and public documents of the United States. 


The mussulman law was not made for the foreigner, because he is 
a non-mussulman ; it was, therefore, necessary that he should be sub- 
jected to his own law. . . . The mussulman law, that is, the Jus 
quiritium, is the exclusive right and privilege of mussulmans, and it 
is the Jus gentium which governs the foreigner. . . . 2 

From 1535, when the French made the first treaty which guar- 
anteed that French consuls and ministers might hear and deter- 
mine civil and criminal cases between Frenchmen without the in- 
terference of a Cadi or any other person, to the present century, 
agreements between the Sublime Porte and European states 
gradually withdrew foreigners from the jurisdiction of the local 
authorities for most civil and criminal purposes. 

The example set by France was followed by the English in 1675, 3 
the United States in 1830, 4 and many others. These agreements 
became so numerous that writers on international law came to 
regard the institution as part of the public law of Europe. 

The judicial system set up under the Capitulations worked well 
from the point of view of the capitulatory Power which attempted 
to administer justice and not so well from the point of view of the 
Turkish officials who were deprived of the opportunity of enrich- 
ing themselves through the bribery and corruption notorious in 
Turkish judicial administration. 

In general, cases involving more than ten pounds were tried be- 
fore a court composed of a Turkish presiding judge, and two 
Turkish and two foreign members ; civil cases involving less than 
ten Turkish pounds between a foreigner and Turkish national 
were tried before a Turkish court in the presence of a dragoman 
of the interested consulate. Civil cases involving foreigners of the 
same nationality and those between foreigners of different nation- 
alities were tried by consular courts, except cases involving real 
property which were tried by Turkish courts. Criminal cases in- 
volving foreigners of different nationalities and those involving a 

2 In this respect the Roman law of the classical period offers a striking simi- 
larity. Roman citizens were subjected to the Jus quiritium a privileged code of 
law and foreigners to the Jus gentium special rules falling short of the Jus 
quiritium. (G. Pelissie" du Rausas, Le regime des capitulations dans L f Empire 
Ottoman, 2d ed.; 1, 21.) 

3 Brit, and For. St. Pap. f 1812-14, Part I, 750. * 8 Stat. L; 408. 


Turk and a foreigner were tried before Turkish courts in the 
presence of a dragoman of the consulate involved. 

When these Capitulations were entered into, Turkey was out- 
side the pale of international law ; but by the Treaty of Paris of 
1856, terminating the Crimean War, the Sublime Porte was for- 
mally admitted into the society of nations and came within the 
pale of international law. Turkey's admission to the family of na- 
tions, however, did not lead to the abrogation of the Capitula- 
tions, and until 1914 it protested against them without avail. On 
September 10, 1914, taking advantage of the general disorder in 
Europe, the Porte informed the Powers that the agreements 
known as Capitulations would be abrogated on and after October 
1. The capitulatory Powers refused to acquiesce in the abroga- 
tion, and lodged their customary diplomatic protests with the 
Turkish Government. The issue remained in suspense until the 
Treaty of Lausanne of July 24, 1923. 

Article 28 of that treaty reads : 

Each of the High Contracting Parties 5 hereby accepts, in so far 
as it is concerned, the complete abolition of the Capitulations in 
Turkey in every respect. 

Annexed to the Treaty are two supplementary instruments, one 
dealing with the position of foreigners as regards conditions of 
residence, business, and jurisdiction, the other containing a decla- 
ration by the Turkish Government relating to the administration 
of justice. By the first instrument Turkey allows to foreign na- 
tionals free access to its courts on terms of equality with its own 
nationals. Matters involving personal status, e.g., marriage, di- 
vorce, guardianship, succession on death, etc., of foreign nationals 
in Turkey will be subject to the jurisdiction of the tribunal of the 
national whose personal status is in question. By the second in- 
strument the Turkish Government goes on record as being pre- 
pared to have an investigation made into the judicial system; for 
this purpose, it proposes to take into its service a number of Eu- 
ropean legal counselors whom it will select from a list prepared 

5 The Contracting Parties referred to are the British Empire, France, Italy, 
Japan, Greece, Rumania, and the Serb-Croat-Slovene State. Germany in 1917 and 
Soviet Russia in 1921 renounced the Capitulations in Turkey. 


by the Permanent Court of International Justice of The Hague 
from among jurists nationals of states which did not participate 
in the World War. 6 

The United States was not a party to the Lausanne Treaty of 
July 23, 1923, but it negotiated a separate treaty with Turkey on 
August 6, 1923. Article II of the Treaty declares the Capitula- 
tions abolished : 

The High Contracting Parties declare the Capitulations concern- 
ing the regime of foreigners in Turkey, completely abrogated, both 
as regards conditions of entry and residence and as regards fiscal 
and judicial questions, together with the economic and financial sys- 
tem resulting from the Capitulations. 

The United States Senate on January 18, 1927, refused to ap- 
prove the Treaty, and the State Department, through Rear Ad- 
miral Bristol, American High Commissioner in Turkey, entered 
into a general agreement of a temporary character pending the 

o The former Ottoman Capitulations in *Iraq gave way to the system set up by 
the Judicial Agreement annexed to the Anglo-'Iraq Treaty of October 10, 1922, 
under which 'Iraq became a British mandate. The Agreement declares that for- 
eigners who are parties to civil and criminal proceedings may ask that their cases 
be heard by a court which includes a British judge or judges; that is to say: 

(a) Where the court consists of a single judge, e.g., a criminal magistrate's 
court or a court of a single judge in civil matters, the judge shall be British. 

(b) Where the court consists of three judges, e.g., bench courts of first instance 
in civil matters, courts of session, and the Court of Cassation, there shall be at 
least one British judge who shall preside. 

(c) Where the court consists of five judges, e.g., the Court of Cassation in full 
bench, there shall be at least two British judges, one of whom shall preside. 

Not all foreigners may have resort to these courts. They are open only to the 
nationals of any European or American state which formerly benefited by the 
judicial capitulations in Turkey and did not renounce them by any agreement 
signed before the 24th July, 1923, and of any Asiatic state which is now perma- 
nently represented in the Council of the League of Nations. 

The Ottoman capitulatory system in the French mandates of Syria and Lebanon 
gave way to a judicial system constructed on lines similar to that of the British 
mandate of 'Iraq. (R6publique Francaise. Rapport a la Societ des Nations sur 
la Situation de la Syrie et du Liban, 1927.) The report goes on to say that "un 
magistrat francais concourait dans toutes les juridictions au jugement des 
affaires civiles, commerciales et p6nales, quelle que fut la nationality des plaideurs. 
Lorsque Tune des parties en cause etait trangere, le droit de demander une ma- 
jorit6 des juges francais lui 6tait accord^. L'instruction en matiere trangere 
restait confine a des magistrats francais." The aim of the mandatory has been to 
strengthen the judicial administration to a point where the mandatory might with- 
draw entirely in favor of the local inhabitants. 


negotiation of a new treaty. This subject will be dealt with in a 
later volume of the Survey. 

The beginnings of the Capitulatory system in Egypt, like those 
of the Turkish system, lay in the striking contrasts between the 
judicial systems of the East and West. Until 1875 in Egypt six- 
teen or seventeen consulates exercised jurisdiction over their 
nationals. In addition there were native tribunals. In civil and 
commercial matters, the defendant was brought before his own 
tribunal; a native was brought before the local tribunal, and a 
foreigner before his consular court. The rule act or sequitur forum 
rei was applied. The contracting parties did not know before what 
court they might be called upon to appear. A desire to appear be- 
fore a friendly court would lead one of the parties, whenever a 
possibility of litigation arose, to grab whatever property there 
might be involved in order to provoke his opponent to sue. A suit 
had to be brought in as many different forums as there were dif- 
ferent national defendants. This often led to contradictory judg- 
ments. Appeals from the lower consular courts had to be taken to 
the country of the foreign national. The judicial administration 
fell into a state of chaos ; the situation was intolerable and reform 
became imperative. 

To rectify these abuses the Reglement d? Organisation Judici- 
aire emerged in 1875. This document established the Mixed 
Courts of Egypt, outlined their jurisdiction and provided for the 
selection of the foreign members of the Courts and their tenure of 
office. District courts were set up at Cairo, Alexandria, and Man- 
sour ah, with an appeal court at Alexandria. A district court con- 
sists of three judges, two of whom must be foreigners. Appeal 
court decisions are rendered by five judges, of whom three must 
be foreigners. The judges are appointed by the King of Egypt 
and hold office for life. 

The Mixed Courts have worked admirably, and this for three 
reasons: (1) the organization set up is in harmony with the 
Egyptian sense of national dignity; (2) the Egyptian plays a 
large part in the judicial administration of the Courts, and (3) 
in bringing order out of chaos the Courts have rendered Egypt a 
real service and have gained the confidence of the Egyptian 



IN a broad generalization Adam Smith expressed the striking 
economic difference between East and West in the early days 
of modern trade when he observed that the East farmed and 
manufactured but did not carry. 1 Consequently the West had to 
come to the East. By more than any other factor the imagination 
of the western sea rovers had been stirred by the presence in Eu- 
ropean markets of oriental teas, silks, spices, and porcelain, 
brought from the East by the overland route. These luxuries were 
a constant incentive to the navigators to find an all-sea route to 
"the Indies." With the Portuguese discovery in 1498 of the Cape 
route, the way was open, and into Asiatic waters sailed first the 
Portuguese, after them the Spaniards, then the Dutch, and finally 
the English, who established a trading post or "factory" at Can- 
ton in 1684i. To the Chinese they were all "ocean men." 

A century later the same attraction turned to the East the im- 
agination of America while it was still in the swaddling clothes of 
nationhood. Sailors, home from the revolutionary wars, circulated 
in New England tales of the fabulous profits to be made in the 
"East India trade," arousing Yankee trading instincts with such 
stories as the one told by John Ledyard of sixpenny North Ameri- 
can furs on sale at Canton for $100. 2 New England merchants 
threw themselves with zest into preparations for the first expedi- 
tion, equipping the Empress of China, which set sail from New 
York in 1784. From this beginning America rapidly attained a 
position second only to England as a carrying power in the Ori- 

American ships traded mainly in the products of other lands. 
Trade of American origin was slight, as at this time the United 
States had little agricultural wealth to export, the barren soil of 
New England driving the New Englanders to sea as builders and 

1 Adam Smith, Wealth of Nations, Book II, chap, v (4th ed.), p. 185. 

2 Tyler Dennett, Americans in Eastern Asia, p. 5. 


sailors of ships. China on its part had little necessity to buy, hav- 
ing a fertile soil, which produced every kind of food, and an abun- 
dant population which had no equal as agricultural laborers, as 
makers of clothing, and as handicraftsmen. With the absence of 
necessity was combined a lack of inclination or even curiosity. 
China's self-sufficiency was grandiloquently expressed by the Em- 
peror Chien Lung to George III : 

. . . our Celestial Empire possesses all things in prolific abun- 
dance and lacks no product within its own borders. There was there- 
fore no need to import the manufactures of outside barbarians in ex- 
change for our own produce. But as the tea, silk, and porcelain which 
the Celestial Empire produces are absolute necessities to European 
nations and to yourselves, we have permitted, as a signal mark of 
favour, that foreign hongs should be established at Canton, so that 
your wants might be supplied and your country thus participate in 
our beneficence. 8 

Only one commodity was in demand which America could supply. 
This was wild ginseng, a root which for centuries has been es- 
teemed in China as a cure-all and particularly as an aphrodisiac. 
If tea is the most celebrated plant of China, ginseng may be 
called the royal plant, for it was reserved for the use of the em- 
peror and his household, being conferred only as a mark of favor 
on lesser mortals. 

When America started to trade with China the wild ginseng of 
China was scarce and to save it from extinction its gathering had 
been forbidden by special decree. 4 The root flourished in New 
England and in the mountains of West Virginia. Ginseng was 
thus an early example of a product which although of no local 
worth may be a valuable article in international trade. To the 
Americans it was the "useless produce of our mountains and for- 
ests" until it came to be exchangeable for the "elegant luxuries" 
of China. The trade, begun by British Indiamen, received an im- 
petus both from the new demand in China and the essay into the 
China trade by the New Englanders. The Empress of China 
sailed from New York with over forty tons aboard. For several 

s Backhouse and Bland, Annals and Memoirs of the Court of Peking, p. 333. 
* Encyclopaedia Sinica, p. 206. 


years ginseng was America's most important export product to 
Canton and it remained a factor in Sino-American commerce for 
over a century. 

Another important export article was furs. John Ledyard's 
story had not been overdrawn, and the American shipowners did a 
lucrative business which from 1818 to 1827 netted them $300,000 
a year. 5 But, in consequence of Russian competition, the price of 
furs gradually fell, and China's imports ceased altogether about 
1825, the current being reversed some decades later when Chinese 
furs and skins entered into international trade, and became third 
in importance in China's exports. 

Trade was maintained in the face of unexampled difficulties. 
The political obstacles of relations through the crack at Canton, 
which was sometimes closed altogether, have already been re- 
counted. 6 Another difficulty was the imposts levied by the local 
officials at Canton. Though behaving with the hauteur dictated by 
the Court, they did not omit to line their pockets out of fees, com- 
missions, tonnage dues, import and export duties, and all that 
goes under the generic term of "squeeze." 7 The Chinese merchants 
also did well. Though the fur trade was very profitable to the for- 
eigners, it was more remunerative to the Chinese, and the mer- 
chants grew prodigiously wealthy, one of them, by name Houqua, 
valuing his estate in 1834 at $26 million. Some of this, incidentally, 
later found employment in American railroad building. 8 These 
merchants, collecting silks and other stuffs from the Chinese 
makers at absurdly low prices, charged the eager foreigner as 
much as the traffic would bear, while in return the foreigner had 
to cut the prices of his wares to meet Asiatic purses. Sometimes 
the East India Company, which monopolized English trade until 
1834, bore losses in order to establish English woolens on the China 
market. Buying was the raison d'etre of the first voyages, but a 
pressure to sell had developed out of the growth of the modern 

5 Timothy Pitkin, A Statistical View of the Commerce of the United States 
(1835), p. 251. 

e See pp. 7 if. 

7 Frederick Hirth, in the Journal of the North China Branch of the Royal Asi- 
atic Society (Shanghai, 1882). 

s Letters, and Recollections of John Murray Forbes. 


factory system of the West, and the need for markets caused the 
Company at one time to insist that the Chinese should sign con- 
tracts to accept part payment for their own products in these 
woolens. 9 Nevertheless the commodity exchange fell far short 
of an equivalence and the difference had to be met in Carolus dol- 
lars, introduced by the Spanish from the Philippines, for which 
the Chinese retained a fondness until the mid-nineteenth century. 
In consequence the drain of silver to China was so considerable 
that up to 1830 Europe had poured into China no less than $500 
million. 10 

Americans were also liberal contributors of silver, and many 
occasions are recorded of American vessels sailing out to China 
with holds empty save for kegs of Spanish dollars. Generally, 
however, American vessels shipped American merchandise to Eu- 
rope, thence, with the proceeds in Spanish dollars but otherwise in 
ballast, they went on to China via the Cape of Good Hope or 
returned to America and then continued the voyage round the 
Horn. C. F. Remer has estimated that 60 per cent of the value of 
the goods brought to China by the Americans from about 1800 to 
1835 was in the form of silver. 11 Although the customs records do 
not show the figures, information from merchants in the trade and 
the size of imports from China would indicate that about 1812 two 
or three million dollars annually were exported to China. Dennett 
writes of a House committee report which in 1819 stated that "the 
whole amount of our current coin is probably not more than 
double that which has been exported in a single year to India, in- 
cluding China in the general term." 12 Some indication of the im- 
portance of the China trade may be gathered from this observa- 
tion. It is indorsed by the experience of the most important New 
York house trading with China which in 1824 reported its exports 
as follows : specie, $900,000 ; British manufactured goods, $356,- 
407 ; American products, furs, ginseng, etc., $60,000. 

Traders cast around for a commodity which would pay for their 
purchases instead of specie. They found it in foreign opium. 

9 Staunton, Notices Relating to China, pp. 163-168, quoted in Chong Su see 
The Foreign Trade of China, p. 275. 

1 S. D. Webb, Journal of the American Asiatic Association, June, 1914. 
11 The Foreign Trade of China, p. 24. 12 Op. cit., p. 20. 


Opium is said to have been introduced into China by the Arabs 
as far back as the thirteenth century ; at any rate it was known 
to have been grown in China before foreign opium appeared and 
to have provoked the issue of an edict against opium smoking in 
1729. 18 While the Chinese still showed an indifference to other 
merchandise that the westerners brought, they took avidly to 
opium from India, and the traffic throve mightily, even after 1800 
when it was declared illicit. H. B. Morse 14 says : 

The explanation of the fact that merchants of the highest repute 
brought themselves to engage in a trade which we have come to re- 
gard as disreputable is to be found in the imperative commercial 
necessity of lessening the constant flow of silver from the depleted 
European market. 

In their turn the Chinese watched with dismay the drain of silver 
caused by these swollen opium imports, and to the high moral 
grounds on which the Imperial Government based its hostility to 
opium importations there was added an economic argument 
equally urgent. No mention, however, was made of the commodity 
in the first treaty of 1842, 15 though this treaty ended a war with 
England arising chiefly out of the opium dispute, and the traffic 
became so ramified that it was finally "legalized" in 1858, when 
an international commission quietly inserted the item in the Chi- 
nese tariff. Before and after this it figured for many years as the 
main import of China, constituting in 1867 as much as 46 per cent 
of total imports, but at length its long and checkered career came 
legally to an end by agreement between China and England. In 
accordance with this agreement, which was signed in 1911, both 
the trade and Chinese cultivation were declared illegal in 1917. Of 
late years, however, the illicit cultivation of the plant in China 
has assumed very large proportions. 

Since the trade was mainly in Indian opium, American vessels 
did not deal extensively in it, and the balance of trade between 
China and America still ran against America. But the change 

is C. W. Campbell, China; British Foreign Office Handbooks, No. 67. 

i* Trade and Administration of China, p. 359. 

3 c Opium was declared contraband, however, in the first United States treaty 
with China, the Treaty of Wanghia, 1844, but the Chinese were left to enforce the 
provision. See p. 16. 


from a net inward to a net outward movement of silver affected 
the American payments. With China owing money to England, 
American vessels began to carry bills on London instead of silver, 
and world settlements, which had been in vogue in the West In- 
dian trade, grew in respect of the China trade out of the simple 
process which had thitherto prevailed whereby every American 
vessel squared its account in hard money. Silver payments ebbed 
and flowed in succeeding years, but since 1888, when reliable Chi- 
nese statistics on the import and export of the metal first ap- 
peared, the movement on balance has been inward, for, in spite of 
the fact that in commodity transactions China buys more than it 
sells, more than compensatory income is received in remittances 
from Chinese abroad and in payments from abroad to foreigners 
resident in China. As for the old Spanish dollars, they have been 
scattered throughout China and may still be found in circulation 
in certain districts, where they command a premium over the local 
dollar, 16 which normally has had about half of the value of an 
American dollar. 

Early in the East- West maritime trade the movement of cotton 
cloth was outward from China. It took the form of nankeens, or 
heavy unbleached material called after Nanking. Though the 
East India Company made some headway with its woolens, its cot- 
tons could not compete with China cottons. The inventions of 
Arkwright and Whitney began to turn the tide, but the effect was 
not great until the railroad and steamship had shortened the 
distance and lessened the cost of transport between western fac- 
tory and oriental market. In China these developments of the in- 
dustrial revolution had two effects : first, they drew China defi- 
nitely into trade relations with a much shrunken world, second, 
they broke down the competitive resistance of the Chinese cottage 
industry, thus altering the basis of commercial relations, which 
had hitherto rested on an exchange of China's luxuries for a west- 
ern miscellanea of surplus products, and establishing a trade in 
cotton goods which grew prodigiously with the years. 

In the work of distributing Lancashire piece goods American 
vessels played a prominent, and for a future competitor, an ironi- 

ie China Tear Book, 1923, p. 269. 


cal part. Scouring the seven seas for cargo they found a remu- 
nerative business in carrying English manufactures. In 1833 
Shanghai berthed 41,501 tons of American shipping as compared 
with 35,610 tons of British shipping. 17 Some part of this success 
was due to the intermittent wars which diverted European ship- 
ping from the China trade, but in the main it was due to design 
and not accident. By the perfection of the American type of clip- 
per ship, which appeared about 1840, American vessels were able, 
according to Dennett, 18 "almost to monopolize" for a time "the 
transportation of tea even to England, for they could carry 
larger cargoes and deliver the tea in shorter time and in fresher 
condition than could their competitors." By the middle of the 
nineteenth century half of the foreign trade of China was con- 
veyed in American bottoms. 19 The United States also had the 
lion's share of shipping on the great Yangtze River, its boats 
numbering seven out of nine. In 1851 the Americans demon- 
strated their maritime superiority by issuing a challenge to race 
an American built and officered ship against a ship built and offi- 
cered by the British from any European port to China and back 
for a stake of $50,000. When no acceptance was received the club 
first raised the stake to $100,000, then offered the Englishmen a 
two weeks' start. There was no answer to the challenge. 

The islands of Japan lay out of the course of ships engaged in 
the China trade. Whether they took the Cape or the Horn route, 
they had no need to enter Japan waters. But American shippers, 
alive to the desirability of trade relations, indorsed the complaints 
of whalers whose operations in the North Pacific, valued at nearly 
$17 million in 1853, were attended with difficulties created by 
Japanese hostility. 20 To a merchant named A. H. Palmer, accord- 
ing to Secretary Clayton, 21 is due "more credit for getting up the 
Japan expedition than any other man I know of." Palmer was the 
director of the American and Foreign Agency, commission agents 
of New York, and to his other distinctions added that of fathering 
business by circular. Before the Perry expedition he had sent 

IT H. B. Morse, International Relations of the Chinese Empire, I, 342-343. 
is Op. cit., p. 179. is W. E. Soothill, China and the West, p. 87. 

20 See p. 18. 21 G. N. Steiger, History of the Orient, p. 368. 


fourteen circulars into Japan through the Dutch "factory." But 
Palmer's hopes had to be deferred until the American flag ap- 
peared over the Golden Gate. This event, together with the build- 
ing of a transisthmian railway, heralded a direct service of steam- 
ships between San Francisco and Shanghai, the line passing 
through Japan waters. The consequent need for coaling stations 
in Japan was not the least of the factors leading to the Perry ex- 

The opening up of Japan was the last event in the period of 
America's carrying eminence. Two developments contributed to 
the subsequent decline: first, the passing of sailing days, and 
secondly, a turning inward of national energies. Superiority in 
metallurgy enabled the English to build first their iron and then 
their steel ships more efficiently and at lower cost than the Ameri- 
cans could. More effective was the development of a profitable 
internal market in the United States, which offered the lure of 
higher profits and became even more lucrative during the era of 
high protection after the Civil War. 

America thus entered upon a period of industrial preparation 
and for that work American pioneers abroad came back to pio- 
neer in America. A better illustration of this introversion than 
imperfect statistics is furnished in the Letters and Recollections 
of John Murray Forbes. Forbes was a prosperous American mer- 
chant prince at Canton. In 1836 he records letters from his 
brother in America advising him to invest part of his fortune in 
the new American railroads. Forbes, however, was unwilling to do 
so, and expressed his belief that they would be a failure, because 
"the wear and tear proves ruinous." In the following year he re- 
turned to Boston to supervise the American end of his flourishing 
China business, which had been a family concern since the early 
days of trade, but his interests gradually turned away from China, 
and concentrated on American railroads! Such a faith in their 
future developed in him that in 1846 he took a tenth share in buy- 
ing from the state of Michigan its road, a quarter completed, 
of which he later became president. Extending his holdings to 
other systems, he passed the remainder of his life as a railway ex- 


America, like Forbes, turned its back on the sea, which had 
yielded such rich experience, and devoted itself to the enrichment 
of national life. Eclipse as a world carrier came in the seventies. 
In 1871, 43 per cent of the China carrying trade was American 
but the proportion had declined to 5 per cent by 1877. The de- 
tailed extent of the decline, which has never been repaired, 22 may 
be gathered from the following table of China shipping at different 
periods : 23 

1864 1W4 1884 1894 

Tons Tons Tons Tons 

British 2,862,214 4,738,793 12,152,949 20,496,347 

American 2,609,390 3,184,360 2,140,741 129,127 

Total 6,635,485 9,305,801 18,806,788 57,290,389 


INDUSTRIAL preparation after the Civil War was accompanied by 
an activity in cultivating Chinese taste for the commodities which 
were the first fruit of American internal development and its 
means of payment for industrial equipment from Europe. Of 
these flour and kerosene "created as great a social revolution in 
China as did the advent of tea and the introduction of gas into 
England." 24 The more spectacular was kerosene, which length- 
ened the working day and increased the output of China's home 
industries immeasurably. A piece of rush dangling over the side of 
a saucerful of vegetable oil formerly illumined the night hours of 
the Chinese, but the light was dim, the smoke and soot were un- 
healthy and disagreeable, and relatively to kerosene this means of 
illumination was uneconomical. 

A successful assault on this mode demanded a new technique in 
marketing foreign goods in China. The system in vogue was cal- 
culated neither to open markets nor reduce prices. The foreign 
manufacturer loaded his merchandise onto the home quays for 
consignment to the foreign merchant at the treaty port. On his 
part the foreign merchant, immured in the treaty ports, turned 
the incoming goods over to his Chinese associates who handled and 
disposed of them over a long line of Chinese middlemen. To meet 

' 22 In 1928 the American quota in China's carrying trade was 4.17 per cent. 

23 H. B. Morse, Trade and Administration of China, p. 313. 

24 E. H. Parker, China, Her History, Diplomacy, and Commerce, p. 185. 


the potential demand the foreign manufacturer's best plan is to 
deal directly with the Chinese consumer. "Foreign traders can only 
hope to dispose of their merchandise in proportion to the new tastes 
they introduce, the new wants they create, and the care they take 
to supply what the demand really means." 25 Appreciating this 
desideratum the Standard Oil Company in the nineties developed 
and controlled a low unit price to the ultimate consumer and then 
equipped and sent all over China an army of agents to demon- 
strate the economic merits of kerosene with a smokeless oil lamp 
which could be purchased at a nominal cost. Within a compara- 
tively short time the company had overcome the difficulties of cus- 
tom, language, communications, and currency, and had ushered 
kerosene into the category of Chinese necessities. 

The citadel of Chinese prejudice or conservatism was thus dis- 
covered to be guarded only by that sense of the practical which is 
the inevitable accompaniment of low living standards. Chinese 
poverty does not allow the people to experiment with the merely 
new-fangled, but when they have been persuaded by actual dem- 
onstration of the economic merits or superior virtues of an article, 
their "sales resistance" vanishes, whether the merchandise be for- 
eign or Chinese. As soon as it found that kerosene appealed to 
Chinese practicality, the Standard Oil Company brought to the 
work of distribution as ramified an organization as it had intro- 
duced in the field of merchandising. A line of tankers appeared on 
the Pacific run which fed innumerable tanks along the China coast 
and rivers. Sometimes these tankers, drawing as little as six inches 
of water, navigated tiny creeks into the heart of China, pumping 
their load into a wayside tank for conveyance by cart into the vil- 
lages. This campaign, which was the precursor of high-pressure 
salesmanship by thirty years, enabled kerosene to jump to the fore- 
front of American trade, the quota in 1928 being 17 per cent of 
the total exports to China. 

Direct merchandising was then copied to push the sale of to- 
bacco, the first product that the United States had in excess of 
home requirements. That its disposal among China's millions 
early attracted attention is indicated by Congressional speeches 

25 Sir Robert Hart, These From the Land of Sinim, p. 60. 


in 1843 prior to the dispatch of Caleb Gushing to China. Repre- 
sentative Holmes of South Carolina, for example, exclaimed, "No 
man now had it in his power to estimate how much of our surplus 
productions might be sold in that almost boundless country, and 
how much of our tobacco might be there chewed in place of 
opium." 26 The difficulty in part was the old trouble of price. This 
was overcome by the adoption of the measures followed by the 
Standard Oil Company. An army of salesmen, directly employed 
by the foreign manufacturers, invaded the country, and purveyed 
cigarettes at unit prices within reach of almost the meanest purse. 
The campaign resulted in the creation of a market for American 
leaf tobacco and cigarettes amounting in 1928 to 27 per cent of 
the total United States exports to China. 

The success of these direct methods induced other manufac- 
turers of staple commodities in the general category of consump- 
tion goods to export to China their organizations as well as their 
goods. The movement was expedited by the progressive concentra- 
tion of American industry. With the financial resources gained 
from mass consumption in the home market, corporations were 
able to nurse a demand in the Chinese market, sometimes with un- 
der-cost prices. Sewing machines thus became a necessity in the 
Chinese household. California raisins captured Chinese taste ; in- 
deed the rapidity with which raisins circulated throughout China 
gave rise to the saying that in that country they mark the limits 
of the penetration of western civilization. Of all western commodi- 
ties few have gone deeper than American kerosene, flour, tobacco, 
and raisins, and few have been more potent in undermining what 
was formerly regarded as prejudice against foreign goods. 

Such ambitious efforts to establish western commodities in China 
reflect the hold on western imagination of the possibilities of trade 
with the four hundred million inhabitants. These potentialities are 
so fascinating that they once formed the excuse for an American 
refusal to entertain an international proposal of disarmament. 
"The United States," said Captain (later Admiral) Mahan at 
The Hague Conference of 1899, "will be compelled by facts, if 

26 Congressional Globe, February 28, 1843, p. 325. 


not by settled policy, to take a leading part in the struggle for 
Chinese markets, and . . . this will entail a very considerable in- 
crease in her naval forces in the Pacific, which, again, must influ- 
ence the naval armaments of at least five Powers." 27 Population, 
however, may be a snare and a delusion as an index to buying 
power. H. M. Stanley used to stir Manchester audiences by draw- 
ing eloquent pictures of the prospects of commerce with Africa 
when the naked negroes of the Congo should have been persuaded 
by missionaries to wear clothes at least on Sundays. When the 
natives had further learned to cover their nakedness on week-days, 
the looms of Lancashire were to know no cessation of activity. 
Similarly the late Wu Ting-fang was wont post-prandially to 
hold forth on the great accretion to trade which would result when 
the Chinese should have been induced to add half an inch to their 
shirt-tails. But like African, Chinese buying power is at present 
restricted. In spite of the early fables of the sated East, it is a 
bitter fact of modern experience that hunger is the dominant 
problem of China. Economically China is what Dr. Goodnow 28 
calls a vegetable civilization, meaning that the people are depend- 
ent mainly upon the plant world for their food and clothing. In 
this department it is not self-supporting. Population has been 
outracing available food supply since the days when Chien Lung 
declared China's independence of the world. It is estimated that 
one out of every eight Chinese, or fifty million people, are in a 
state of starvation or semi-starvation. 29 

Baron Takahashi, 80 rating the wealth of China at $52 billion, 
shows that it is surpassed by the United States, Great Britain, 
Germany, and France. On this basis China's per capita wealth 
would be $130 as compared with $3,500 for the United States. In 
other words, the average American is between twenty-five and 
thirty times wealthier than the average Chinese. Wealth in China 
is also so thinly spread through division of labor and ownership, 

27 British War Origin Documents, I, 231, Doc. 282, Note on Limitation of 

28 F. J. Goodnow, China: An Analysis, p. 39. 

29 Fang Fu-an, China Critic (Shanghai), February 6, 1930. See also p. 71. 

so Quoted by Charles Hodges, in a paper contributed to American Relations 
with China, Johns Hopkins University. 


family responsibility, and the prevalence of home industry that 
even in this vast country many articles of a nonconsumable va- 
riety find no market at all. Take, for example, the case of China's 
premier industry, agriculture. With agriculture employing about 
350 million Chinese, it might be thought that China presents a 
vast potential market for the tractors, harvesters, and threshers 
of America, but agriculture in China is divided into tiny holdings, 
of which five acres would be a good-sized farm, and is therefore in 
no position to support elaborate machinery. Another important 
occupation in China, as a sideline to agriculture, is egg produc- 
tion, probably the greatest in the world. Nevertheless it must not 
be supposed that China can consume patent henhouses and pat- 
ent chicken-food, for the poultry raisers in China are millions of 
housewives, each raising a dozen or so chickens which have to find 
their provender as best they can. 

Buying power has other restraints besides that of low per 
capita wealth. Of prime importance is internal disorder, with its 
consequences in high cost of transport and crippling taxation. 
Rapacious war lords contending for power have practically 
reached the limits of direct taxation, having in one province, 
Szechwan, collected the land tax thirty-one years in advance. 81 
If they have no mercy on the people who live on the ragged edge 
of penury, they have less consideration for the merchants engaged 
in making, moving, and disposing of goods. China, being an 
agglomeration of quasi-independent units, is not endowed with the 
blessings of internal free trade such as has developed the commer- 
cial greatness of Germany and the United States. For years past 
inland taxation on native trade has known no bounds. The handi- 
cap is enhanced by such a lack of system that exports as well as 
imports receive the attention of the tax collector. Eggs and egg 
products are among the most remunerative of China's exports, 
but this fact does not save a new-laid egg on its way from farm to 
port from being subject to a customs duty, produce and examina- 
tion taxes, educational taxes, and charitable taxes, besides many 
varieties of likin levies. 32 Consequently it is not to be wondered at 

si Fang Fu-an, op. cit. 

32 British Chamber of Commerce Journal (Shanghai), May, 1929. 


that trade is too dammed up by oppressive exactions to take ad- 
vantage of the premium on exports which the low price of silver in 
relation to gold is at present conferring on China, 

Until 1927, when the Nationalist movement against China's 
treaties gathered momentum, taxation operated in favor of for- 
eign goods. Foreign goods were subject to a treaty tariff at the 
port and a transit tax, both clearly defined. The result was that 
Oregon lumber imported to Shanghai paid an import duty of 5 
per cent while timber from Kweichow had to pay total duties up 
to 17 per cent on its way to Shanghai ; cotton could be sent more 
cheaply from the Yangtze Valley to Japan than to the native city 
of Shanghai ; and wheat moving from Minneapolis to flour mills 
in Hankow cost less than the conveyance of wheat from compara- 
tively near provinces. In 1929 China won relief from treaty 
restrictions on its tariffs, and has put into operation a schedule of 
duties more in accordance with the situation of its domestic indus- 
try. Internal levies, however, have not been systematized, nor have 
they been abated, and nowadays operate indiscriminately against 
foreign and native goods. Taxes and other manifold hindrances to 
trading within China account for the fact that from 40 to 50 per 
cent of all goods entering China are absorbed by the inhabitants 
of the treaty ports. 

The Rise of Japan. 

Japanese success in surpassing China in commerce with the 
United States is thus not difficult to explain. In I860 Japan's 
trade with the United States was $194,000, whereas China's was 
$22,473,000, but in 1890 the comparative figures were: China, 
$19,207,000; Japan, $26,336,000. While China, because of its 
size and resources, could afford until the nineties merely to tolerate 
foreign trade, Japan was in a less favorable condition, being both 
poor and small. The statesmen of the Restoration were quick to 
perceive that if Japan were to become a great power in the modern 
world it must derive from without the financial instruments of 
strength. It obtained money wealth out of war, particularly the 
Sino-Japanese War of 189495, but chiefly it secured remittances 
through the selling of goods and services abroad. Japan's exports, 


which until the eighties were merely the overflow of hand products, 
became the concern of national policy. Paternalism under the 
feudal system was carried over into the management of commercial 
intercourse and the Government breathed regulation so vigorously 
into every department of commercial activity that Japan presents 
today, except for Russia, the outstanding example of government 
in business. Writing of government aid in the disposal of cotton 
goods, a recent investigator says that the Japanese Government 
pays half the expenses for "study journeys" by commercial trav- 
elers in the cotton trade. 33 

To accomplish their ambition Japan's statesmen proceeded to 
harness the country to a specialized economy. The first effect was 
felt in cotton. Cotton used to be grown in Japan, where the ma- 
terials were carded, spun, and woven in the household, but when it 
was found cheaper to import cotton for the new factories, native 
cultivation was allowed to wane. The new source of supply was the 
United States, and the importations advanced so rapidly that in 
1929, 42 per cent of all Japanese takings from the United States 
consisted of this commodity. Of late years the tendency has been 
markedly upward, because the Japanese industry is turning out 
finer goods which require medium-staple raw material from the 
United States. In 1924 India supplied twice as much cotton to 
Japan as did the United States, but since 1927 the two grades 
have practically dominated the Japanese market, with China a 
bad third. 

The trade in raw cotton is of peculiar importance to the United 
States because the ratio of the output sent abroad is higher than 
that for almost any other commodity. It is also the principal ex- 
port commodity of the United States, constituting 15 per cent of 
total exports of which the Far East takes 18 per cent. 

United States cotton now appears in the Far East almost solely 
as raw material. In the sixties cotton goods manufactured in the 
United States rated high in China's imports. United States ma- 
chinery equaled that of China's main supplier, England, and the 
advantage of drawing readily on native raw material saved the cost 
of transport from plantation to factory. But the trade fell off with 

33 Arno S. Pearse, The Cotton Industry in China and Japan. 


the decline of shipping. Of more importance, however, was the 
Civil War, when trade stopped altogether, and i ot until 1870 
was the export of manufactured cottons resumed in any quantity. 
By this time much of the trade had been won away from the 
United States. In place of the United States Japan enx^red China 
as a competitor of England, and the goods handled by ,ooth these 
suppliers advanced so rapidly in Chinese consumption that they 
now sell to China 90 per cent of all the cotton piece goods which 
that country imports, with the United States among the miscel- 
laneous suppliers. 

Policy dictated the transformation of Japanese cotton fields 
into mulberry plantations. Silk culture was necessary to pay for 
the importations of raw cotton and other materials for industry. 
Japan determined to win a place in the supply of the commodity 
which first lured western mariners to the Orient. At that time 
China silk held undisputed sway in the world market, but it was 
too weak to suit the American machines, and no effort was made to 
improve it. Japan set to work to fulfil American requirements. 
Quality was bettered by the introduction of scientific methods in 
the rearing of silkworms and the reeling of silk from the cocoon. 
The Japanese Government subsidized silk manufactures and es- 
tablished testing houses so that the consumer might learn the 
strength and quality of any particular brand of silk. In this way 
Japan challenged the leadership of China, with its established 
markets and natural advantages, and eventually overtook it. 

Even before the World War America imported three times as 
much Japanese as Chinese silk and in 1929, when silk occupied 
first place among United States purchases from abroad, the ad- 
vantage in favor of Japan was sevenfold. Realizing at length the 
importance of the American demand, the Chinese had in 1922 co- 
operated with the United States Testing House of New York in 
establishing a testing house in Shanghai. This was later trans- 
ferred wholly to the Chinese. For all practical purposes the silk 
industry of China still remains relatively antiquated. That it has 
maintained any position at all on world markets is a tribute to its 
natural excellence ; otherwise, says the Statistical Secretary of the 
Chinese Maritime Customs, in his 1928 report, the trade "could 


hardly have survived the rough and ready methods of production 
which have been so slow in changing." This official goes on to offer 
a warning to the silk men of China which has often been uttered in 
these reports : 

A change must be made and that soon . . . science [must be] sub- 
stituted for rule of thumb, if this great source of income is not to be 
lost. Japan commands the Eastern market, exploiting her own pos- 
sibilities to the full. China has the means of competing with a supe- 
rior article, but she must understand that the ruling factor in her 
foreign trade is not what she offers the world, or what she wants for 
it, but what the world wants and what it will pay. 84 

A similar metamorphosis has been witnessed in the famous tea 
trade. No sooner had Japan entered in earnest the lists of inter- 
national trade than it started to challenge China's predominance 
in tea as well as silk. More dangerous competitors were India and 
Ceylon under British auspices. Meanwhile the China tea trade 
pursued old-fashioned methods, and even today, as the Chinese 
customs reports affirm, enterprise is lacking. "Foochow teamen," 
laconically observes the Statistical Secretary of the Chinese Mari- 
time Customs, in the 1928 report already quoted, 85 "appear to be 
imbued with the idea that the world will buy their tea at any 
price." The decline of world takings of China tea is the penalty of 
this attitude as well as a tribute to the zeal of China's rivals. The 
decline has been from 1,576,136 piculs (a picul 133% Ibs.) in 
1908, to 926,022 piculs in 1928. Of America's purchases less than 
10 per cent come from China, or about half the quantity supplied 
by Japan, and the bulk of the trade is in the hands of India and 
Ceylon. Tea, it is true, is not the popular beverage which it was 
when the clippers of New England used to race back with it from 
Canton, for coffee has made a marked inroad in the tea-drinking 
habits of the American people; but no enterprise from China 
has ever attempted either to arrest the fall in America's takings 
of China tea or to promote the habit of tea-drinking. Other pro- 
ducers are vigilant in trying to protect their American market, 

3^ Chinese Maritime Customs 1. Foreign Trade of China (1928), Part I, Report 
and Abstract of Statistics, p. 37. 
SB Ibid., p. 39. 


the Indian producers, for example, initiating a few years ago an 
ambitious "drink more tea" campaign. 

Prior to the commercial and industrial awakening of Japan for- 
eign trade was entirely in the hands of non- Japanese firms. But the 
monopoly was undermined by the adaptability of the Japanese 
people under the aegis of government organization. Not the least 
of the reasons for the easy transformation of Japan was the plia- 
bility of the human material at the disposal of its statesmen. The 
people allowed themselves to be guided in a manner which demon- 
strated their essential psychological difference from the Chinese. 
Instead of patriotism the Chinese with their background of four 
thousand years of civilization have a kind of racial pride which is 
politically based on family government. The enlargement of 
fealty to the state, which is the task of the present generation, has 
to beat against an "inveterate sense of locality" which, according 
to Mill, is the bane of improvement. In Japan, on the contrary, 
roots are not so deep, and the people derive their genius from an 
eclectic adaptation of alien civilization. This eclecticism was 
brought to bear on the nationalistic civilization imported by Com- 
modore Perry. So easily were familism and feudalism amplified 
into nationalism that "the inhabitants of the Rising Sun will de- 
prive themselves of everything and will submit to the payment of 
the heaviest taxes in order to help the government show Europe 
that Japan is in a prosperous condition." 80 

When statesmanship decreed, customs fell, and new standards 
came almost automatically into operation. One of these was the 
advancement of the merchant class in social status. Encouraged 
by their new position in the social hierarchy, subsidized in their 
activities, Japanese merchants, with their recruits from the un- 
employed samurai, or knights of the feudal regime, became as 
modern as their Government, starting banks, insurance companies, 
shipping lines, and branches overseas, through which the mecha- 
nism of Japan's foreign trade came at length under Japanese con- 
trol. That this was no mere imitation of the West is indicated by 
the fact that the personal support of the new commercial struc- 

36 Joseph D'Autremer, The Japanese Empire and Its Economic Conditions, p. 


ture of Japan is the familism of the Chinese civilization. Back of 
all trade stand the five houses of Mitsui, Mitsubishi, Yasuda, 
Sumitomo, and Okura, which have added to the social strength of 
oriental families the economic power of trading organizations. Of 
the five the most important is the house of Mitsui, said to date 
back as far as the seventh century, which handles 19 per cent of 
Japan's import trade and 23 per cent of its export trade. 87 All 
the conditions for rationalization had thus been present and in 
vogue long before the word was invented and no country now ex- 
cels Japan in concentration of commerce and its coordination with 

The mainspring of this enterprise is the economic urge from 
government to factory worker to get non-Japanese to buy Japa- 
nese products. An example of Japanese methods of merchandising 
may be taken from the cotton industry. 

The latest move is to send a steamer with samples, prices and ex- 
perienced commercial men round the world; a floating exhibition 
which will stop at every important port and thus go to the interested 
parties instead of asking them to come to world exhibitions where 
the product of other nations is also shown. Such a floating exhibition 
must be the finest possible training for young men destined to take 
leading positions in the export trade of the country. The educational 
side is never neglected by Japan. There are at any time large num- 
bers of young men being sent out by the cotton mills and export 
merchants at their expense to the four corners of the world, not with 
a view to immediate profit, but to gain information and train powers 
of observation so that they may occupy some day leading positions. 
Few countries, if any, have as many emissaries abroad as Japan ; 
they do not live in luxury abroad and they are not selected on ac- 
count of their relationship, but because they are promising young 

men. 88 

To crown these efforts in the field of foreign trade is the develop- 
ment of a mercantile marine of five million tons steaming far and 
wide over the oceans. The members of the Perry expeditions could 
scarcely have envisaged the time that has now arrived when Japan 
would take America's place as the second carrier in Pacific waters. 

37 Japan Weekly Chronicle (Kobe), March 20, 1930. 

38 Arno S. Pearse, op. cit. f p. 134. 


The Treaty Port System. 

In a large degree China's foreign trade still remains in the 
hands of foreign firms operating under the treaty port system. 
This system once obtained in Japan but disappeared when the 
modernization of the country had made it an anachronism. 
China's littoral and riverine provinces are dotted with foreign en- 
claves, called concessions, settlements, or leased areas, to which 
foreign commercial residence is confined. Beginning with the "fac- 
tory" at Canton, they were thrust upon a hostile China, and were 
located mainly on mud flats. Now they have blossomed into entre- 
pots of commanding importance, cities so western in appearance 
that but for the teeming population the traveler would imagine 
himself in a western metropolis. The main ports of China are all 
treaty ports Shanghai, Tientsin, Dairen, and Hankow. Con- 
trolling 70 per cent of China's foreign trade, these have been built 
up by foreign organization, aided by the political advantages 
possessed by foreigners in China. By far the most important is 
Shanghai, which is responsible for 40 per cent of China's total 
trade and 25 per cent of its transit trade, and has grown into the 
world's third port, being equidistant in shipping time from west- 
ern Europe and eastern United States, the world's most developed 
industrial areas. Significant of its influence on China is the fact 
that under the Nationalist Government it has evolved into a politi- 
cal as well as an economic center of gravity. 

Some Nationalist writers speak of the economic chaos which 
contact with foreign commerce brought to China. T'ang Leang-li 
says that "the general effect of the linking up of the Chinese 
economy with the markets of the world has been . . . the throw- 
ing into confusion of the delicately balanced economic system of 
China." 89 But for the treaty ports, and before 1929 for foreign 
supervision of the customs service, however, the political chaos of 
China might have disarticulated the country for foreign trade 
purposes, and China's delicately adjusted economic system might 
have broken up into local compartments along with the political 

These treaty ports have endowed China with a metropolitan 

so Foundation of Modern China, p. 78. 


economy almost in spite of itself. Nevertheless their influence, 
though recasting the economic map of China, has not modernized 
internal trading conditions, and the line from the Chinese seller 
up-country to the foreign buyer in Shanghai or Tientsin may 
"date" all the way from a thousand years B.C. to nineteen hun- 
dred A.D. It is a line along which Chinese and foreign interests may 
all play their parts before the goods leave China. At the source 
the goods may be obtained by outright barter for calico, yarn, or 
Ingersoll watches. Wool, for example, may be brought to a rail- 
head on camel-back. In all probability it will then be in contact 
with things foreign until it gets to the mill in Massachusetts. It 
may be taken to port along a foreign concessioned railroad, or a 
railroad subject to a certain degree of foreign administration; 
met by a foreign freighter engaged in the coastal trade ; brought 
to a treaty port for modern handling by a foreign trading or- 
ganization and a foreign bank ; and, finally, if it is to be consigned 
abroad, it will almost certainly be carried to market in a foreign 

Of late years a mercantile class has arisen in China which is 
making a bid for control of the mechanism of foreign trade. Cus- 
tom dies hard in China but this class is gradually moving out of 
its lowly status and assuming the appearance of an aristocracy. 
It is indeed the main support of the Nationalist Government at 
Nanking, but, like the Government itself, its influence on internal 
development is frustrated by the political discontents. Internal 
trouble, however, has added to its influence in foreign trade by 
stimulating the concentration of wealth at the treaty ports for 
employment by banks and brokers in international commerce. 
This externalization has made no dent in transoceanic shipping 
and little in coastwise shipping; it is just beginning to manifest 
itself in international banking; but in business relations the 
change is significant. Less than ten years ago the manager of a 
leading American banking institution in China estimated that not 
more than 2 per cent of the letters of credit opened for imports 
with his institution were placed by Chinese firms. 40 The Chinese 
purchaser, financed by his own banks, which are developing cor- 

40 Commerce Reports, U. S. Department of Commerce, July 1, 1929. 


respondent relations with banks abroad, is now dispensing with 
the foreign hong by entering into direct relations with the foreign 
manufacturer. On the export side the same experience holds true. 
Ten per cent of the total silk shipments from Shanghai, January 
1 to May 30, 1929, were effected by Chinese firms, 41 but as com- 
pared with the part played by the Japanese in the direct export 
of Japanese silk, of which in the 1927-28 season they handled 87 
per cent, China is still far behind. 42 


THE Far East is absorbing American merchandise at a faster 
rate than the United States is absorbing Asiatic merchandise. The 
Far Eastern share of American total exports is still only 12 per 
cent, whereas the United States takes from the Far East 30 per 
cent of its total imports ; but the quota of American exports taken 
by the Far East, small as it is, has quadrupled since 189195, and 
doubled since 1913 an advance which is not equaled by any 
other continental area. 

The Modern Factory System. 

The growth in Asia's imports of American merchandise is the 
concrete expression of the importation of western civilization and 
in particular of the modern factory system. By this latter term is 
meant the absorption of the capitalistic economy of large-scale 
production, especially with the aid of power-driven machinery. 
Industrialization in China derives its impulse from a discontent 
with living standards, as contrasted with those of the West. Hu 
Shih says with italicized emphasis: "What is needed today, it 
seems to me, is a deep conviction which should amount almost to a 
religious repentance that we Chinese are backward in everything 
and that every other modern nation is much better off than we 
are." 43 To repair these deficiencies he has repeatedly called upon 
his fellow countrymen to lay the foundations of a "motor car civi- 
lization." This necessitates the recruitment of mechanical power 
to supplement the superb brawn of China. 

4i Commerce Reports, July I, 1929. 42 Japan Year Book, 1929, p. 600. 

43 Preface to Julean Arnold's Some Bigger Issues in China's Problems (Shang- 


It is only through the introduction of modern industrial organiza- 
tion and technology that productivity may be increased, products 
cheapened, and living standards raised [says D. K. Lieu. 44 ] The 
most pressing need in China today is not to even up distribution, but 
to add to an insufficient production. Because of existing living stand- 
ards agriculture has forfeited its right to primary emphasis in 
China's economic program. Industrialization could not only double 
the purchasing power of China ; it could also give an outlet for some 
of the surplus labor now engaged in agriculture. 

The new aim marks a distinct break with traditional China. 
Under the economics of the old system stress was placed on the 
distribution of production rather than on the quantity of produc- 
tion, and this was insured not only by family responsibility but by 
a refined division of labor on tiny land holdings and in small work- 
shops. The fruits of toil were made to go round in a way that 
ironed out grievous inequality. Poverty there was, and much of it, 
but riches conformed to Bacon's dictum by being relatively well 
spread. Whether the consequences of the factory system in the 
dislocation of well-distributed personally-related labor and all 
that this implies may not create as serious a problem as that of in- 
creased production is a question which will be presented to a fu- 
ture China. To the present generation the maintenance of existing 
production will be serious enough. For, though the factory system 
is still immature, agricultural output is on the decline, owing, not 
to diversion of labor to industry, but to social disorder. In 1929 
China imported rice, wheat, and wheat flour to the value of $100 
million, a situation which provoked the chairman of the Bank of 
China, Li Ming, at its last meeting to say : 

It is absurd that we should have imported such incredibly large 
quantities of foodstuffs. This is a life and death problem, yet the au- 
thorities have failed to realize this grave situation, and through 
petty differences continue to wage war on one another. They have 
also failed lamentably in the suppression of bandits, who prey on the 
innocent people tilling the land. I fear that it will not be long before 
the entire structure of the nation may collapse unless this state of 
affairs is brought to an end. 45 

44 China Critic (Shanghai), January 2, 1930. 45 London Times, May 12, 1930. 


The money crops such as silk, tea, cotton, and eggs which pay for 
these foodstuffs are also suffering from rural disintegration. In 
two senses, then, the factory system is starving for necessary 
equipment ; the pool of exchange commodities is declining and the 
smaller pool is being encroached upon to pay for supplementary 

Factory industry in China is impeded by many more difficulties. 
Not least of them is the dearth of that essential servant to a fac- 
tory system, communications. Though it has a good waterway 
system, China has only about 7,000 miles of railroad, or, say, one 
mile for every 65,000 of population and 500 square miles of terri- 
tory. As compared with other countries the system is woefully in- 
adequate. The United States has one mile of railroad for every 
480 of population and twelve square miles of territory; India's 
ratio is one mile to 8,000 population and forty-five square miles. 
Thus, measured by Indian standards of mileage to population, 
China has yet to add 50,000 to its 7,000 miles. Five of the eight- 
een provinces of China proper are without a single mile of rail 
and these five include the richest and most populous, Szechwan, 
which, situated on the "roof of the world, 95 is hemmed in from in- 
tercourse with its neighbors by stretches of mountain ranges 
which leave it with only one outlet, and that the turbulent 
Yangtze. It is true that as contrasted with an arrested situation 
on the railways there is a growing private initiative in replacing 
footpaths and wheelbarrows with macadamized roads and motor 
vehicles, of which latter the number in use has increased since 
1922 from 8,200 to 38,464, 46 but much more remains to be done 
before communications will bridge the hiatus between farm and 
factory which exists today in many parts of the country. To take 
one of many examples of the inadequacy of transport, the Han- 
kow flour miller can better afford to go to the Dakota farmer to 
buy his wheat at the prevailing American market price, transport 
it a thousand miles to Seattle, an additional six thousand miles 
across the Pacific, and six hundred miles up the Yangtze than to 
take the wheat as a gift from the wheat basin of Shensi, only six 

46 A. Viola Smith, Automobile Census of China, United States Department of 
Commerce (1930). 


hundred miles away; for the human beast of burden, who is the 
mode of transport of Shensi wheat to the railhead, is about fifteen 
times as costly as the American railroad. 47 Furthermore, a decay 
of the existing railway system has gradually persuaded large sec- 
tions of the country to revert to the primitive mode of transport. 48 

Factories in China, save those operated by foreigners, who are 
protected by the system of extraterritoriality, 49 are also the prey 
of the tax collector, regular or irregular, who has bankrupted 
many otherwise promising corporate enterprises catering to a na- 
tion-wide trade. The Nanyang Brothers Tobacco Company, 
which started operations twenty years ago, has, for instance, sus- 
pended business chiefly because of "extortionate taxes on native 
tobacco, inability to make shipments inland because of wars inter- 
rupting railway and steamer services, loss of shipments because of 
the prevalence of brigandage and because the country has become 
so poor that local agents are unable to make collections from re- 
tailers." 60 

No such obstacle stifles the progress of industry in Japan. Ex- 
actly the reverse in fact is the case. "There are few industries in 
Japan today that do not owe their existence to government initia- 
tive." 51 Governmental help does not end with promotion, but is 
maintained in paternal assistance, sometimes in the form of exemp- 
tion from taxation and sometimes in the direct form of subsidy. It 
relates its other economic activities to the stimulation of industry, 
establishing research laboratories, which are prolific of new ideas 
and inventions, and encouraging agriculture and fisheries to sup- 
port the increased industrial population practically unaided so 
that Japan may obtain the major proportion of its imports in raw 
materials instead of relying on overseas markets for basic food- 
stuffs, as England does. Japan's industrial evolution has thus 
been so ramified and so peculiar unto itself as to unsettle Adam 
Smith's reflection that "the course of human prosperity . . . seems 
scarce ever to have been of so long continuance as to enable any 
great country to acquire capital sufficient for all those three pur- 

47 Julean Arnold, op. cit., p. 2. ** New York Times, March 80, 1930. 

49 See pp. 176 ff. so New York Times, March 16, 1930. 

ci John E. Orchard, American Geographical Review, April, 1929. 


poses," namely, farming, manufacturing, and carrying. 52 When it 
developed a merchant marine Japan completed the sequence with- 
out allowing any deterioration in its agriculture or manufactures. 

Then there are the difficulties incident to transition. In this re- 
spect Japan was more fortunate than China in that its problem 
was rendered much more compact by the difference between the 
two countries in size and organization. Until 1929, also, China's 
secondary industries labored under the handicap of foreign 
treaty restrictions on its tariff. 53 Moreover, Japan was better 
prepared psychologically for transition. Familism is as yet so 
deeply embedded in the Chinese genius as to frustrate corporate 
organization. A joint-stock company, like the state itself, is still 
an alien conception in China, and familism often degenerates into 
nepotism. Even public utility companies are rarely founded on 
share capital or on the security of a particular town, but on 
money borrowed from banks at rates varying from 12 to 20 per 
cent, which has to be repaid at every China New Year, the Chinese 
settling day. 54 

Not until the World War, when the industrial nations of the 
West were engaged otherwise than in selling, could the Far East 
be seriously regarded as an industrial area. China started to 
manufacture for its own consumption foreign-type goods whose 
importation had been cut off by the disturbance to international 
trade. The results betrayed lack of preparation and haste in sup- 
plying established demand. It was not uncommon to find patches 
in a sheeting resulting from the failure to mix the different grades 
of cotton correctly; leather almost as raw as the original hide; 
matches that blew up by the boxful; and soap as soft as putty. 
The efforts of Japanese manufacturers were directed toward sup- 
plying the markets vacated by western manufactures, and many 
succumbed to the temptation to get high prices for shoddy articles 
in a time of near-monopoly. Inevitably much trade was lost when 
competitive conditions returned, but a good deal of it survived 
and was added to by Japanese experience and enterprise. This is 

B2 Wealth of Nations, Book II, chap, v (4th ed.), p. 185. 

63 See pp. 150 if. 

54 H. M. Department of Overseas Trade, Economic Conditions in China (1929). 


shown in the rapid upswing in the percentage of Japanese manu- 
factured goods to total Japanese exports ; in 1914 this was only 
28.3 per cent, but in 1926 it had grown to 41 per cent. 55 China, 
much richer in resources, does not labor under the same compul- 
sion to pay for imports with the skill of its manufacturing indus- 
try. It has a huge home market at its disposal and can afford to 
concentrate on it. In this market the Chinese factory industry has 
so far succeeded in improving its output that it is virtually inde- 
pendent of imported cotton yarn and simple consumer goods 
(though the independence has been gained with the cooperation 
of foreign factories in China), and has extended its range of 
products from soap to asbestos and from matches to munitions. 
A comparison between the two systems might be based on any 
number of measurements, but probably the most expressive in- 
dices will be found in a statement of the factory population 
and the per capita horsepower at its disposal. In the table below two 
factors must be borne in mind. First, it omits the foreign factory 
enterprise on Chinese soil, 56 with its own enrolment of horsepower 
and labor. This is of such importance that in the cotton industry, 
for example, Japan alone owns 39 per cent of the spindleage. 
Second, a factory varies in definition for statistical purposes. The 
United States provides figures for establishments with an annual 
sale of products valued at $5,000 or more. In the Far East the 
index is the degree of labor concentration ; in Japan workers are 
counted where five or more are employed in one establishment and 
in China where seven or more are so employed. 57 

Horsepower Per capita 

Factory Per cent of of h.p. of 

Population employees population prime movers prime movers 

America 120,000,000 9,724,00058 8. 35,773,00058 .2981 

Japan 60,000,000 1,875,00059 5. 4,652,000^9 .0775 

China 435,000,000 413,000eo 0.1 

Thus the amount of horsepower of prime movers, motors, and 

55 Annual Return of Foreign Trade, 1927, Department of Finance, Tokyo. 

56 See pp. 252 ff. n Date of Census; America, 1925, Japan, 1926, China, 1920. 
SB Statistical Abstract of the United States (1928), pp. 749-751. 

59 Financial and Economic Annual of Japan, 1928, p. 83. 

00 Ho and Fong, Extent and Effect of Industrialization in China, Institute of 
Pacific Relations, quoting statistics of the Ministry of Agriculture and Commerce. 


generators employed in the manufacturing industries is almost 
four times greater per capita in the United States than in Japan. 
Statistics are lacking in China, but in view of the smaller develop- 
ment of manufacturing, it may be assumed that the proportion of 
horsepower to factory labor is less than that for Japan. 

Factory industry in Japan and China started with, and is still 
dominated by, the provision of the material out of which their 
clothes are made, namely, cotton and silk goods. In employment 
of labor the textile group occupies half of Japan's and three- 
quarters of China's industrial population. In equipment the in- 
dustries compare as follows : 

Mills Spindles Looms 

Japansi 259 7,336,494 78,870 

China62 73 2,113,528 16,787 

There is a further difference in quality of product. Japan has 
advanced so rapidly in textile manufacture that it is England's 
most formidable competitor on world markets. Only a fifth of the 
total weight of cotton piece goods produced in the world enters 
international trade, but while Great Britain's share has declined 
from 65 per cent in 1909-13 to 47.4 per cent in 1928, Japan's 
share, which was insignificant prior to the World War, is now 16 
per cent. 68 The situation is the more remarkable because in the 
great market of India England enjoys preferential treatment. 

Japan's success has caused the English teacher to go to its 
Japanese pupil to find out the reason. Recent investigators have 
concluded that the success owes nothing to so-called cheap oriental 
labor. The advantage that the Japanese enjoy in the matter of 
wages is more than offset by the employment of a larger number 
of workers to do a given quota of work. If an English worker can 
produce work equal to the output of four Japanese workers, as 
one authority asserts, 64 then the higher wage scale is easily offset 
by greater per capita output. In any case labor is a comparatively 
small element in the price of cotton goods. The foundation of 

61 Far Eastern Review (Shanghai), November, 1929. 

62 Chinese Economic Bulletin, October 12, 1929. 

68 B. and H. Ellinger, Journal of the Royal Statistical Society, XCIII, Part II 

64 J. W. Robertson Scott, Foundations of Modern Japan, p. 71. 


Japan's success lies in organization, which, as has already been 
shown, grew on fertile soil, springing half -developed out of the 
feudal system and being cultivated assiduously thereafter without 
any interval of industrial laissez faire. The industry is a chain 
made up of links of buying, shipping, and delivery of raw material 
at the mills, and of manufacture and distribution of the finished 
product, all under the control of a handful of men. Such solidifica- 
tion of industry has no counterpart in England save in the finish- 
ing sections and subsidiary trades. 

The future of the modern factory system in the Far East seems 
to be limited by relative deficiency in those minerals which are the 
essential foundation of a material civilization. Measured by these 
standards the East is receding in potential dominance. While pos- 
sessing many of the secondary metals, it is lacking in iron, which 
in the form of steel Foster Bain calls "the skeleton framework 
within the body of modern civilization." 65 The total ore reserves of 
the Japanese Empire utilizable under existing metallurgical 
processes are possibly 80 million tons, 60 excluding South Man- 
churian deposits under the control of Japanese interests which 
have been variously estimated between 200 and 700 million tons, 
mostly low grade. America's reserve is ten billion tons. A mass of 
data exists on the iron ores of China, but the leading authority, 
F. R. Tegengren, 67 sums up the situation by saying that "the to- 
tal quantity of iron ore (both actual and potential) . . . would 
be consumed by the iron industry of the United States within less 
than nine years." It is not surprising, therefore, that the Far East 
provides a market for 20 per cent of United States surplus iron 
and steel. One exception to the relative paucity of basic mineral 
wealth in the Far East is the coal reserves of China. These are 
estimated by the Geological Survey of China at 217,626 million 
tons, 68 or a per capita reserve of 549 tons. The per capita reserve 

65 Ores and Industry in the Far East, p. 67. 

6 <* J. H. Ehlers, Raw Materials Entering Into the Japanese Iron and Steel In- 
dustry, United States Department of Commerce. These figures do not take account 
of vast deposits of iron sands in Japan upon which research is now being ex- 

07 The Iron Ores and Iron Industry of China, Geological Survey of China, p. 29. 

os C. Y. Hsieh, General Statement on the Mining Industry (1918-25). 


of the United States is 34,274 tons. On the basis of this compari- 
son Foster Bain observes 09 of the Chinese reserve that it is 

sufficient to furnish power for considerable industrialization, but if 
China is going to use it with the same liberality per capita that the 
nations of Western Europe and North America have done, then 
clearly she has not got a coal reserve sufficient for any long time 

It should also be borne in mind that most of China's coal is an- 
thracite and non-coking and is located far from available ore de- 

Effect on Character of Trade. 

The success of the factory system in the United States has re- 
sulted in a revolution in the structure of American trade. More 
and more American finished goods are finding an outlet in for- 
eign markets ; from 31 per cent in 191014 their share of Ameri- 
can exports has grown to 44 per cent in 1925 and 49 per cent in 
1929. 70 In Asia the rise has been even more marked; in 191014 
finished goods constituted only 16 per cent of American exports 
to Asia ; in 1925, 44 per cent ; and in 1929, 45 per cent. 71 No dam- 
age has therefore been done to American factory sales by the 
industrial movement in Asia. Instead, by elevating living stand- 
ards, it has intensified demand, notably for tobacco products and 
kerosene, the main exports from the United States to China. Even 
in simple manufactures China has a long way to go before it can 
hope to do more than scratch the surface of the market which the 
import of foreign-type goods has created. Chinese hides are still 
shipped back from United States factories in the form of shoes. 
Bristles are similarly transformed and returned as brushes. For 
more elaborated commodities such as machinery the factory sys- 
tem in Asia has provided a market which seems destined to grow to 
major dimensions. Factory and transport equipment and such 
power-producing articles as dynamos, electric motors, transform- 
ers, and steam boilers are the agents of new large-scale produc- 
es Foreign Affairs, April, 1928. 

70 The Philippine Islands, however, are excluded in the figure for 1910-14. 

71 Foreign Trade for the Calendar Year (1929), United States Department of 


tion. Already this group is second in importance to raw cotton in 
United States exports, and Asia's requirements have helped to lift 
it into that rank, as is apparent from the fact that from 1913 to 
1928 exports of American factory machinery to Asia have in- 
creased from 7 per cent to 11.6 per cent of the total exported. Of 
recent years exports of this group of goods to China have been 
arrested, owing to the stifling of enterprise by Chinese turmoil, 
but the increase which marked the period from 1913 to 1925 will 
inevitably be resumed at the first sign of stabilization. 

In Japan, where the market is more limited, the case is differ- 
ent. The import of shoes and brushes and such merchandise 
dwindled as Japanese factories grew in stature and efficiency. In 
regard to machinery Japan in 1929 spent about $80 million on 
railway materials of which only 1 per cent was imported.. Japan 
prefers to buy articles in semifinished form for fabrication into 
finished goods. For this purpose iron manufactures are second to 
raw cotton, albeit a bad second, in Japanese import requirements. 
Of Japanese iron and steel imports in 1928 the United States sup- 
plied 26 per cent, and of its takings of copper ingots and slabs the 
American share was 88 per cent. A large amount of its lumber, 
which is third in importance in its imports, comes from the Pacific 
coast of the United States, and forms a necessary element in the 
construction industry of Japan. 

China's arrested buying power for machinery is partly respon- 
sible for the fact that since 1925 the share of finished goods in to- 
tal United States trade with Asia has remained stationary while 
this classification has been advancing rapidly at the expense of 
other groups in the total exports of the United States. Another 
reason is the firm hold of crude materials in United States ex- 
changes with the Far East. The bulk of United States imports 
from Asia is represented by crude materials. Silk from Japan, 
rubber and tin from Malaya, wool, hides, and certain metals from 
China, jute from India these are the main items. That the 
United States is eager to buy them is indicated by its tariff policy. 
Excluding the Philippines, the proportion in 1927 of the value of 
dutiable to all imports from Asia was 22 per cent as compared 
with 36 per cent of all imports ; in other words, of every $100 of 
goods from Asia $78 enter duty free. 


For the same reason that the United States is seeking more raw 
materials from abroad it is withdrawing more and more of its own 
raw materials from the export market to work up into finished 
exports. The tendency is observable in the trade with Asia as in 
world trade, but it is not so marked, because the Far East is short 
of other materials besides minerals, and needs many of American 
origin. 72 Trade between Japan and the United States consists 
peculiarly of a raw material exchange. Of Japanese sales on the 
United States market in 1929, 80 per cent consisted of raw silk; 
of Japanese purchases from the United States raw cotton repre- 
sented 42 per cent. Since silk and cotton are the main agents of 
Japan's prosperity, this exchange has riveted its economy to 
American conditions. A Japanese industrial leader puts the rela- 
tion in this picturesque way: "The price of United States Steel 
Common on the New York Stock Exchange is infinitely more im- 
portant to the economic well-being of Japan than the current quo- 
tation of the yen. In fact, one is cause, the other effect." 73 Adverse 
conditions in America not only affect the national economy of 
Japan, they percolate down to the humblest village, for sericulture 
is not limited to the industrial towns but in the main is a spare- 
time pursuit of the prolific rural population. Since it helps them 
to eke out a precarious living on their tiny farms, its value is 
as much social as economic in keeping the people on the land and 
in maintaining a balance between agriculture and industry. The 
work of reeling silk is almost as scattered as the rearing of silk- 
worms or the cultivation of mulberries, and, though in this respect 
the industry is becoming mechanized, the traveler may see reeling 
still carried on in sheds attached to country cottages. 

In respect of materials in general China is more fortunately 
situated for industrial expansion and less dependent on imports. 
Helpful to its premier factory industry is the fact that it is the 

72 A converse situation from that prevailing in the total trade of the United 
States in raw materials is to be found in the whole of its trans-Pacific trade, i.e., 
with Oceania as well as with Asia. Since 1910-14 the amount of crude materials 
exported to those regions has increased from 16 per cent to 26 per cent of the 
total. American receipts of crude materials from Asia and Oceania have also 
increased, from 54 per cent to 65 per cent. The development has made the trade 
on the Pacific Ocean more than ever a traffic in raw materials. 

73 Maurice Holland, Industrial Transition in Japan, p. 45. 


world's third producer of cotton. To cater to diverse tastes, how- 
ever, a national cotton industry has to spread its demand for raw 
material among areas of production yielding uneven qualities of 
cotton. In China the cotton fibers are too short for anything but 
coarse material, and to spin the best yarn the best native varieties 
have to be mixed with American cotton. Hence, as the demand for 
better goods grows, as it does continuously, the budding Chinese 
industry as well as the Japanese industry must turn to America 
for more of its raw material. This is shown in the increased ex- 
ports of American raw cotton to China and Japan : 


(In Thousands of Bales.) 


(average) 1924 1925 1926 1927 1928 

China 14 31 56 172 243 170 

Japan 283 675 1,003 1,251 1,437 1,225 

This increment has brought the Far East quota of United States 
raw cotton exports up to 18 per cent. 

The prospect of long-term increase in United States raw cotton 
exports to the Far East is sometimes thought to be darkened by 
the planting of United States cotton in China, largely under 
United States missionary and educational auspices. Experiments 
have long been in operation to prove that in North China United 
States cotton can be grown and acclimated without loss of quality. 
"The average [production per] mow [% of an acre] of the 
farmer who used the improved cottonseed has been found to be 79 
catties [a catty = 1% lb.] and is 29 catties more than that of the 
ordinary cotton." 75 This high ratio of improvement is attested by 
experimental stations throughout the cotton belt. If China were in 

74 Commerce Yearbook, 1925 ff. This remarkable movement upward was 
checked in 1928 by several extraordinary factors. "... outstanding feature in 
Japan's import trade was the drop in raw cotton imports, as a result of heavy 
stocks and restricted production of yarn in 1928." Ibid. (1929), II, 399. From 
China it is reported in the 1928 customs returns that unusually high prices in the 
United States and unusually low prices in India caused a veering away from the 
United States; Foreign Trade of China, Part I. Report and Abstract of Statis- 

75 T. F. Tung, China Weekly Review (Shanghai), February 13, 192G. 


a position to apply this lesson on a large and intensive scale, there 
might eventually be no need to import United States cotton, and 
Japan would have a source of supply in China which might com- 
pete with the United States. In the present state of China, how- 
ever, it is one thing to grow improved seed at experimental sta- 
tions and another to transform cotton cultivation. That much 
improvement has to be eff ected in Chinese cotton may be gathered 
from the fact that whereas the area of land available for cotton 
cultivation in China is about the same as in the United States, the 
output is only a fifth as much and the quality a lower grade. The 
difficulty in regard to silk and tea applies with equal force to cot- 
ton ; declining quality has been a lament of many reports of the 
Chinese Maritime Customs. In his 1922 report the Commissioner of 
Chinese Maritime Customs for Shanghai, for instance, stated: 
"This continued demand for foreign raw cotton is due to the pau- 
city of China's present cotton crops, which have shown a steady 
decline since 191819 and are quite insufficient for the require- 
ments of the 2,300,000 spindles now operating in the country." 
He called upon the Chinese to take energetic measures to improve 
and extend cotton farming, but little has been done, and the ex- 
tent of the lethargy is expressed in the acceleration of the increase 
in imports which caused such alarm to the Shanghai commissioner. 

Volume of Trade with Japan and China. 

At one time the western factory-system nations entertained the 
fear of an Orient arising out of industrialization which would not 
only be self-contained but which would flood the world with cheap 
goods. For reasons already stated this fear has given place to a 
renewed fascination in the prospects of Asia's millions endowed 
with western purchasing power. When a nation produces more, it 
can support a larger population and fulfil more wants, and when 
China, to which most attention is drawn, does begin to increase 
production, the effect on two-way trade will be dynamic, and the 
ownership of the means for satisfying the new demands will call 
in increasing measure on foreign as well as on Chinese labor to 
supply them. 

The great advance which started in 1890 has made Japan by 


far the most important of all the Asiatic countries in American 
commerce. In a commercial sense the United States is much more 
important to Japan than is Japan to the United States, as is shown 
in the following table : 

United States Trade with Japan Japan Trade with the United States 

Per cent Per cent 

of of Per cent 

United United of total 

States States Japanese 

world Asiatic foreign 

trade trade trade 

Exports to Japan 6 40 Exports to the United States 42 . 

Imports from Japan 9 36 Imports from the United States 28 

As a market for United States exports Japan has advanced from 
tenth to fourth place since 191013 and as a supplier of United 
States requirements has moved up from seventh place to second 

This is not the whole record of United States trade with Japan. 
The United States has also dealings with Japan in China which 
are entered as Chinese imports. On Chinese soil Japan operates 
railroads, cotton mills, sugar refineries, mines, flour mills, and 
many other industrial interests, altogether valued at about a bil- 
lion dollars. 76 Among the requirements of these establishments are 
large supplies of American machinery, railroad equipment, lum- 
ber, raw cotton, and wheat. The Japanese-leased South Manchuria 
Railway, for example, is at present of far more consequence to 
American manufacturers of railroad equipment than all the rail- 
ways in the Chinese government system combined. Though the 
total trade with these Japanese undertakings is difficult of com- 
putation, several estimates have been made. In a speech before the 
Rotary Club of New York, Mr. M. Uchiyama, Japanese Consul 
General in New York, said : "It is fair to state that from 30 to 40 
per cent of United States exports to China are purchased in this 
country by Japanese firms for the account of Japanese enter- 
prises in China." 77 George Bronson Rea, publisher of the Far 
Eastern Review, stated that he had been informed that the quota 

76 Masnoske Odagiri, Japanese Investments in China, p. 4. Institute of Pacific 
Relations. Also p. 252. 

77 Far Eastern Review, November, 1927. 


was "as much as 49 per cent." 78 If 30 per cent be regarded as a 
reasonable estimate, then of the $120 million (United States value 
of Chinese customs figures) of China's takings from the United 
States in 1928, no less than $36 million were destined for Japan 
in China. 

China's share in the trade of the United States is half that of 
Japan's. Of total imports into the United States in 1928, 4 per 
cent came from China (including Hong-kong and Kwangtung) ; 
of total exports from the United States China absorbed 3 per cent. 
These proportions put China in the ninth place among importers 
from the United States and tenth in the list of exporters to the 
United States. In recent years the positions of both China and 
Japan have fluctuated more than those of most countries because 
of the marked price changes in silk and cotton which dominate the 
trade. In 1923, when silk was bringing high prices, China held 
fifth place among exporters to the United States, but since then 
prices have receded considerably, with depressing eff ects on values 
but not on volume. 

As in the case of Japan, the United States sells much more in 
China than it buys. In 1870 the American quota of China's imports 
was about half of one per cent, in 1907, 7 per cent, in 1913, still 
7 per cent, but since 1920 it has risen to between 16 and 18 per 
cent. Since 1910, while China's total trade has only doubled, the 
American share of it has quadrupled, an increment which has been 
won mainly at the expense of Great Britain. It is the general ver- 
dict of students of this commerce that the American figures would 
be even higher if the facts of the transshipment trade with China 
could be unscrambled. 79 In China's customs records imports are 

78 China Weekly Review, December 10, 1927. 

79 Julean Arnold, United States Commercial Attache* to China, after estimating 
that in 1927 the United States possessed nearly 25 per cent of China's foreign 
trade, says: "America is, without any question of doubt, China's principal cus- 
tomer, as it purchases more of China's commodities than does any other foreign 
nation. If China's trade with Hongkong were unscrambled so as to assign to each 
nation the trade which properly belongs to that country, and if due allowance 
were made for America's trade with China as now credited to Japan, there is a 
possibility that for the year 1927 America may have occupied first place in China's 
foreign trade." (China Weekly Review, November 10, 1928.) Instead of the $220 
million in trade which the Chinese returns classified as American in 1927, Mr. 
Arnold would therefore make the total $350 million, taking account of the prove- 
nance and destination of the transshipment trade. 


not credited to the original point of consignment but to the last 
port of shipment. American cotton from the Gulf ports, often sent 
to China via Kobe, appears in the Chinese returns as Japanese im- 
ports ; American lumber is often put on board vessels sailing from 
Vancouver and is recorded in China as having come from Canada ; 
this also applies to machinery built in the United States which is 
often shipped to China from the same port. The position of Hong- 
kong makes difficult an evaluation of the United States share of 
China's imports. Hong-kong appears as a separate trade area in 
the Chinese customs returns, but in fact originates and consumes 
few goods, being an entrepot for the distribution of the goods of 
all nations. According to Dr. Shu-lun Pan 15 per cent of United 
States imports from Hong-kong may be considered as coming 
originally from China and 50 per cent of United States exports 
to Hong-kong may be regarded as ultimately destined for China. 80 
In 1927 and 1928 the relative positions of the different trade 
areas are given in the Chinese customs returns as follows : 


Imports from Exports to 

1927 1928 1927 1928 

Japan 28.41 26.39 22.74 23.06 

Hong-kong 20.56 18.68 18.47 18.37 

United States 16.13 16.99 13.25 12.83 

Great Britain 7.26 9.40 6.31 6.16 

Several efforts have been made to analyze this huge trade between 
Hong-kong and China. In 1924 a careful survey stated that 22 
per cent should be credited to Great Britain, 12 per cent to Japan, 
and 9 per cent to the United States. 81 The trend of this investiga- 
tion is not in accord with that of other investigations. A British 
authority 82 states that Great Britain can probably claim "a sixth 
of Hongkong's trade with China," or about 17 per cent, as com- 
pared with 22 per cent which is credited to Great Britain by the 
Department of Commerce. Mr. Gull thinks also that "Japan's 
exports to China through Hong-kong are larger than ours, and 
those of the United States not very much smaller, if at all," a 

so The Trade of the United States with China, p. 78. 

si Commerce Reports, November 14, 1927, p. 383. 

82 E. M. Gull, Times Trade and Engineering Supplement, October 26, 1929. 


statement which is again at variance with the Department of Com- 
merce investigation. 

Still there can be no question, even allowing Great Britain a 
generous percentage of the Hong-kong traffic, that United States 
trade with China is in excess of British. It is more difficult to con- 
trast United States trade with Japanese. A correct knowledge of 
the origin and destination of the trade now called Hong-kong 
trade would probably not improve the United States quota of Chi- 
nese trade as compared with the Japanese quota ; Japan as well as 
the United States has a large share of this traffic. This is not the 
case with that portion of the United States trade which is now 
credited to Japan or Canada because it is shipped from Kobe or 
Vancouver. The separation of this would reduce the Japanese fig- 
ure and increase that of the United States at one and the same 
time. It is therefore evident that the position of the United States 
is of greater significance to the foreign trade of China than has 
usually been surmised. 

Japan as a Borrower. 

Japan was one of the first countries to seek financial assistance 
in the United States ; this was in 1905, when New York bought 
part of a sterling issue. Since then financial relations between 
Japan and the United States have been marked by definite stages 
corresponding to the development of the credit standing of cor- 
porate enterprise in Japan. First borrowing was restricted to the 
Government ; then the municipalities entered the market, their of- 
ferings being guaranteed by the Government ; and finally corpo- 
rate enterprises, mainly electric light concerns, became important 
enough in the life of Japan to enable them to secure accommoda- 
tion in New York without relying on the pledge of their Govern- 
ment. Signs are not wanting that Japan is also becoming an in- 
terest of the United States stockholder, through the medium of 
United States corporations and investment trusts, as well as of the 
United States bondholder. This form of direct investment is grow- 
ing with the expansion of American business ; it escapes statistical 


computation, 88 although as much as $50 million must have been 
sunk in this manner in the industrial equities of Japan, mainly 
utility undertakings. That it is welcome was indicated by Kengo 
Mori, chief Japanese delegate to the Conference of Reparations 
Experts in 1929, in an address in New York on June 18, 1929. 84 
Speaking of the progress so far made in the financial relations 
between Japan and the United States, he said that he would not 
be surprised if this progress were followed by the American invest- 
ment public becoming partners in the enterprises themselves. 

Altogether, out of a foreign debt of about $750 million, Japa- 
nese securities outstanding in the American market total $200 
million, though an uncomputed amount must have been bought 
back by individual Japanese. Most of this sum is represented by 
the great earthquake loan of 1924, when a group headed by J. P. 
Morgan & Company issued $150 million 6% per cent bonds, due 
in 1954, mainly for the purchase of materials necessary for recon- 
struction. In November, 1929, the same group also came to the 
assistance of Japan when it wished to return to the gold standard 
by establishing in New York a one-year credit of $50 million. 

Of the entire Japanese debt two thirds has been employed for 
productive purposes and one third for military purposes, bor- 
rowed mainly in time of war. 85 American capital is thus advancing 
the buying power of Japan and helping it to import increasing 
quantities of special manufactures, the takings of which are always 
the first to suffer in time of depression. 

Perhaps of major significance in the financial relations between 
Japan and the United States is the repeated attempt to attract 
United States capital for Japanese employment on the Asiatic 
mainland. At one time Japan hoped to effect the economic reno- 
vation of China with Japanese-United States money. Of vital need 
to the island kingdom is the building up of an exchange with 
China of manufactured goods for raw materials. Japan would like 
to rely much more on its Asiatic neighbor for essential raw mate- 
rials than has hitherto been possible owing to lack of Chinese or- 

83 See, however, Odate, Japan's Financial Relations with the United States; 
Columbia University, New York, 1922. 

84 New York Times, June 19, 1929. 

so Financial and Economic Annual of Japan, 1927, pp. 46-49. 


ganization. While the World War was still in progress Japan felt 
that of all the belligerents only the United States and itself would 
for some years to come be in a position to off er the means and or- 
ganization for developing Chinese resources. The opportunity 
seemed providential if the United States could be won over to an 
attitude at best of copartnership or at least of acquiescence in 
Japanese action. Japan's expressed hopes took different forms. In 
the post-war German vein in respect of Russia, Marquis Okuma 
once declared that what China needed was American money and 
Japanese brains. 86 With more suavity Viscount Kaneko found a 
place for American brains as well as money. "Only the joint efforts 
of America and Japan," he declared to a meeting of the American- 
Japan Society in Tokyo, "could exploit and develop the resources 
of China." 87 Several war-time missions, particularly the Shibu- 
sawa and Megata missions, came to the United States on a voyage 
of promotion. Little was said during the visit beyond generaliza- 
tions of the desirability of cooperation (although Judge Gary of 
the United States Steel Corporation on several occasions disclosed 
his sympathy with the schemes as promulgated from Japan) but 
after the War the conversations widened under American auspices 
into four-power negotiations ending in the formation of the new 
China Consortium. 88 In recent times the course of events seems to 
indicate that Japan's war-time attitude has broadened into the 
realization that its economic hopes would be achieved as effectu- 
ally by world concert in the task of vivifying the economic system 
of China. 

But there remained the hope of attracting United States capi- 
tal to Japanese enterprises in Manchuria. Inherited as the prize 
of the 1904 war with Russia, these had developed into a Japanese 
imperium in imperio, focused on the South Manchuria Railway, a 
semiofficial enterprise 51 per cent of which is owned by the Japa- 
nese Government. The lease of this vital link between the trans- 
Siberian railway and the ports of China and Japan had been 
extended under pressure from twenty-five to ninety-nine years by 
the Chinese Government as part of the privileges obtained under 

se A. Morgan Young, Japan in Recent Times, p. 103. 

87 New York Times, October 5, 1917. 88 See pp. 243 ff. 


the Twenty-one Demands of 1915. Most of the other economic 
agencies of Japan in Manchuria have a connection with officialdom 
which it is reasonable to suppose goes beyond the peculiarly inti- 
mate relation maintained between the Japanese Government and 
ordinary Japanese business. Among them is the Oriental Develop- 
ment Company, which has invested about $30 million 89 in Man- 
churia and Mongolia, mainly in land development. 

Enough has been suggested to account for the friction between 
the Chinese and Japanese administrations in Manchuria. To the 
United States the relation is mainly of interest in its bearings on 
the traditional policies of the open door and the maintenance of 
the territorial and administrative integrity of China. 

For some time after the Japanese took it over the South Man- 
churia Railway borrowed in London, but "much to the disap- 
pointment of British interests expended the funds which they had 
obtained in London in placing orders for railway material in the 
United States." 90 Willard Straight thought that the Japanese 
were partly influenced by a desire to make amends in some way for 
the Japanese failure to fulfil an understanding to merge the 
S. M. R. in the round-the-world transportation scheme which was 
the dream project of E. H. Harriman. The South Manchuria 
Railway continued to borrow in London but did not stop its pur- 
chase of equipment from the United States, amounting to some $2 
million a year. After the failure of the Japanese- American plan 
for China, the possibilities of a loan application by the South 
Manchuria Railway to New York bankers acquired circulation 
from reports in the Far Eastern newspapers, 91 but no steps seem 
to have been taken, and nothing further occurred until 1927, 
when conversations were reported in Japan and New York be- 
tween the South Manchuria Railway and J. P. Morgan & Com- 
pany, the head of a group of interested banks, with a view to 
floating a loan variously stated at $30 and $40 million. According 
to President Yamamoto of the South Manchuria Railway the 
money was required to refund bonded debt outstanding in Japan, 

89 Manchuria Daily News (Dairen), January 3, 1930. 

90 Louis Graves, Asia, June, 1923. 

i Weekly Review of the Far East (now China Weekly Review), September 24, 
1921, for comment and reports from other papers. 


to replace rails and rolling stock, and to carry out productive 
works in subsidiary concerns of the South Manchuria Railway. 
Since the conversations were the culmination of several years of 
planning, they attracted considerable attention in Japan, and 
eventually came to the notice of the Chinese, who denounced the 
project vigorously. The late Marshal Yang Yu-ting, chief of 
staff to the late Marshal Chang Tso-lin, declared that he con- 
sidered the proposal 

a great provocation to the Chinese government and the Chinese 
people. They had enough Japanese material and influence in Man- 
churia already without the loan. . . . With American money the 
Japanese could build railways and exploit Manchuria so that a di- 
rect issue could be raised between the peoples of China and America. 92 

This statement, made in Peking to a gathering of journalists, was 
cabled all over the world, and brought the question of the loan to 
the forefront of discussion. It was followed by cables to the United 
States from other Chinese organizations registering opposition, 
which was taken up by vocal groups of friendly Americans. 

Since 1922 the State Department has assumed the function of 
passing on all foreign loan applications, 93 and the conversations 
were therefore extended to Washington. Obviously the supervision 
of almost any foreign loan is embarrassing to the Department 
responsible for the handling of foreign relations. An awkward 
dilemma was involved in this particular case. Since the immigra- 
tion controversy of 1924 the State Department had been anxious 
to smooth the ruffled feelings of Japan. At the same time it prob- 
ably felt unable to ignore the outburst in China, especially Yang 
Yu-ting's attack, which was unprecedentedly blunt for a Chinese 
official. Moreover, the loan conversations took place at a time when 
Nationalist enthusiasm in China had communicated itself to many 
publicists and organizations in America. 

Eventually the flurry disappeared from public discussion, but 
no statement has issued from Washington or the banking house or 
the South Manchuria Railway Company to account for the man- 
ner in which the negotiations died away. It would seem that the 

02 North China Daily News (Shanghai), November 30, 1927. 
s See Survey, 1928, Section II, chap. iii. 


State Department followed the good Bismarckian practice of ask- 
ing the bankers to help it avoid facing the dilemma by not press- 
ing for a decision. The South Manchuria Railway has, however, 
decided to welcome foreign investment in its properties. For this 
purpose it has divorced all the subsidiary properties which hith- 
erto have been controlled by the South Manchuria Railway, floated 
separate companies, and released them to outside participation. 94 
This is a development which is in line with the policy enunciated for 
Japan in general by Mr. Mori. A postscript to the affair was the 
flotation in 1928 in America of bonds having a par value of $19.9 
million by the Oriental Development Company. This is the second 
time this company has entered the American money market, the 
first time being in 1923, when it raised $19.9 million, but since 
then it has announced that it has given up Manchuria as "a poor 
client." 95 

The Consortium. 

A characteristic of the loan situation in China is that it has 
been dominated by international organization through consor- 
tiums of bankers enjoying specific support from their govern- 
ments. No other country has been responsible for the creation of 
financial machinery of the magnitude of that which awaits China 
when it is in a position to use such aid. While the fact that inter- 
national lending to China is a witness to the possibilities of in- 
vestment in that country, the impulse to the Consortium idea must 
rather be sought in the sphere of diplomacy, for the Consortium 
represents an effort to solve both the difficulties created by inter- 
national jealousies and the stress of financial competition in a 
country where investment has potentialities of large profits. Under 
the exigencies of existing treaty relations with China business rela- 
tions may go even further. "It is . . . in a sense true," says Mac- 
Murray, "that the international status of the Chinese govern- 
ment is determined and conditioned by its business contracts with 
individual foreign firms or syndicates, scarcely if at all less than 
by its formal treaties with other governments." 06 

York Times, December 18, 1929. 
as Manchuria Daily News, December 19, 1928. 
90 Treaties, etc., Preface, p. xv. 


American interest in consortiums dates from the Taf t adminis- 
tration. On the express desire of the State Department, which re- 
quired their services as the "indispensable instrumentality" 
needed by the United States Government to enable it "to carry 
out a practical and real application of the open door policy," 97 an 
American group of bankers was formed to participate in the Hu- 
kuang Railway loan of 1911. The American share of this loan is 
still outstanding. Upon the advent of the Wilson administration a 
proposal to float what came to be called the Reorganization Loan 
of 1913 was approaching conclusion. As the name implies the 
proceeds were destined to reorganize administration under the new 
republican regime; at the same time the bankers felt it necessary 
to insure in the loan agreement some degree of control over the 
handling of the general revenues of the Chinese Government. This 
feature of the agreement was disliked by President Wilson. When 
the American group declared its willingness to seek a share in the 
proposed issue if requested to do so by the Government, the ad- 
ministration declined to make the request "because it did not ap- 
prove the conditions of the loan or the implications of responsi- 
bility on its own part which it was plainly told would be involved 
in the request." 98 The statement, which was made direct from the 
White House, provoked the withdrawal of the American banking 
group from the loan negotiations. To Nationalist China the loan 
was regarded as "a staggering blow struck against Chinese de- 
mocracy," for it was concluded without the sanction of the new 
republican parliament, and with the proceeds "Yuan [Shih-kai] 
began a campaign of assassination and bribery, followed by mili- 
tary operations against his political opponents. And thereafter he 
kept the country under the iron heel of militarism until his 
death." 99 

International lending to China lay in abeyance throughout the 
period of the World War. During this time a steady stream of 
Japanese money flowed through the empty coffers of the irrespon- 
sible Chinese administration in Peking into the capacious pockets 

7 Cong. Record (1909). How President Taft and Secretary Knox forced an en- 
trance for American bankers is related in For. Rel., 1909, pp. 144 and 178. 
8 For. Rel, 1913, pp. 170-171. 
e Quo Tai-chi, North China Daily News, July 14, 1921. 


of its officials. A political flavor about these loans was as displeas- 
ing to the other Powers as the improvident spending of borrowed 
money was alarming to holders of Chinese government debt. 

Into this situation the United States Government precipitated 
the suggestion among the Powers that new machinery might be 
created for future financing of China on a much broader basis of 
collaboration than the Japanese had anticipated. Only from 
Japan was there much hesitation ; it was as chagrined at the pros- 
pect of giving up the reins it held over China as disappointed 
that its plans of Chinese renovation under Japanese- American 
auspices had become so transformed. Hesitation appeared also 
in the discussions for working out the new scheme. The starting 
point of negotiations that options upon which substantial progress 
had been made should be pooled did not conform with the Japa- 
nese wish to reserve from the scope of the Consortium the vast 
region of South Manchuria and Eastern Inner Mongolia. To 
protect interests in that region Japan asked for written guaran- 
ties. After much note-writing and submission of formulas the 
request was withdrawn, but in the Far East it was openly stated 
on circumstantial evidence that a "gentleman's agreement" had 
taken the place of a written one. Be this as it may, the negotia- 
tions, which started in July, 1918, concluded in the signature of 
the new China Consortium of October 15, 1920, by banking groups 
representative of the United States, Great Britain, France, and 
Japan, which have since been joined by Belgium. The new com- 
bination includes but does not dissolve the banking groups in the 
old combination. In addition the groups contain many more bank 
members; the American group, for example, embraces between 
thirty and forty banks, whereas the group in the old Consortium 
had only five. 

The prime purpose of the Consortium, 100 declared the late Paul 
S. Reinsch, 101 United States Minister to Peking during the nego- 
tiations, was "to safeguard the unity of the Chinese Republic, to 
gather up the total energy of foreign financial effort for the sup- 

100 For documents see The Consortium, Carnegie Endowment for International 
Peace; other relevant documents are to be found in Correspondence Respecting 
the New Financial Consortium in China, Mis. No. 9. Cmd. 1214 (1921). 

101 Chinese Social and Political Science Review, Vol. VII (Peking, 1923). 


port of a unified government in China, and to prevent a situation 
in which, on the contrary, the financial energies of each power 
might have been directed primarily to the development of its own 
interests within any certain region of China." 102 In its pristine 
form the open door had reference only to equal commercial treat- 
ment in spheres of influence. This policy was enlarged to include 
the preservation of China's territorial integrity, but this later 
element was not originally intended to be directed against the 
sphere system but to guard against the possibility after the Boxer 
uprising that as an entity China might disappear altogether. 
Prior to the signing of the Consortium there was ground for fear 
that both China's integrity and the open door to trade in spheres 
of influence were being encroached upon. Whether the Consor- 
tium has in fact ushered in an open door to financial operations in 
spheres will be known only when it undertakes an enterprise in 
South Manchuria or Yunnan province, which are spheres of in- 
fluence of Japan and France respectively. A more succinct way 
than Reinsch's of summing up the prime function of the Consor- 
tium is that it served "to demonstrate that, though China might 
be in chaos and disunion, it was no longer possible for the powers 
to do as they pleased, even though they were united in benevolent 
intent." 103 

Of outstanding significance was the program of the Consortium 
in connection with productive loans. By assuming the responsi- 
bility for initiating the Consortium the United States Government 
wished to facilitate what the American banking group called "the 
full development of the large revenue resources from only a few 
of which China at present realizes a satisfying income." Without 
interfering with general enterprises in banking, industry, or com- 
merce, it proposed to deal primarily with loans to or guaranteed 
by the Chinese Government or provincial governments which ful- 
filled not only major administrative needs but provided for com- 
prehensive reconstruction. It thought particularly in terms of 
communications, the inadequacy and disorder of which is progres- 
sively clogging the political as well as economic circulatory system 

102 See pp. 37 ff. for discussion of American policy. 
IDS Young, op. cit., p. 193. 


of China. How grievous is this need has already been demonstrated. 
In this respect the program of the new Consortium differed pro- 
foundly from that of the old Consortium, whose resolution of 
September 26, 1913, confined its activities to administrative 
loans, and caused much disquiet to Nationalist China. 

On the Chinese side the writings of Dr. Sun Yat-sen afford an 
indication of the philosophy of Nationalist approach to interna- 
tional lending : 

In order to carry out this project successfully I suggest that three 
necessary steps must be taken: First, that the various Governments 
of the Capital-supplying Powers must agree to joint action and a 
unified policy to form an International Organization with their war 
work organizers, administrators, and experts of various lines to for- 
mulate plans and to standardize materials in order to prevent waste 
and to facilitate work. Second, the confidence of the Chinese people 
must be secured in order to gain their co-operation and enthusiastic 
support. If the above two steps are accomplished, then the third step 
is to open formal negotiations for the final contract of the project 
with the Chinese Government. 104 

The first step was accomplished by the Consortium. The second 
step failed of attainment. Opinion in China was definitely hostile 
to the Consortium, alleging that China was faced with a financial 
monopoly, fearing that political control would go hand in hand 
with the extension of loans, and rebelling at the prospect of grant- 
ing controllable security, that desideratum in banking and inves- 
tor eyes. To the generality of officials a Consortium existed to fill 
their rice bowls, as the Reorganization Loan had done, but though 
several administrations held conversations with the bankers, they 
were sensitive to public opinion, and shied off any discussions of 
security. Several opportunities were afforded by the Powers for 
China formally to recognize the Consortium, but they were ig- 
nored, and in 1923 the special agent of the American Group of 
the Consortium withdrew from Peking. To this day no operation 
has been undertaken, though the organization is still in being, and 
at a conference in London in 1927 agreed to remain in existence 

104 Sun Yat-sen, The International Development of China, Shanghai, p. iii. 


in perpetuity, subject to a twelve months' notice of withdrawal 
by a member group. The last statement by a Consortium banker 
was made by Mr. T. W. Lamont at the 1929 annual conference of 
the International Chamber of Commerce at Amsterdam: 

China's own banking and investment resources are increasing, and 
as time goes on China herself may be able, I hope, to finance largely 
her own enterprises of public utility. There are, however, certain Chi- 
nese individuals from whom I have heard, persons who are perhaps 
not as sound and conservative as our friends here; and such indi- 
viduals seem to think that with civil war largely ended and with a new 
government established, China would, even now, have no difficulty in 
obtaining from the American market such loans as she might require. 
On this point we must be realists, and the greatest lack of friendship 
that we could show to-day would be simply to speak pleasant words 
to the Chinese, to give them general assurance and yet to fail to make 
concrete mention of certain steps that are requisite in the situation. 
It is on this point that frequent inquiry has been made of me. And I 
am bound to reply that at the present moment all who are China's 
friends must realize that China's international credit is at low ebb 
and until careful measures for its re-establishment have been under- 
taken by the Chinese Government, no loans on any scale calculated 
to be helpful could be made in the markets of New York, and I will 
venture to add in those of Europe. A great part of the specific se- 
curity set aside for such foreign indebtedness and for the service of 
such foreign loans has been sequestered, and is no longer being made 
available for the service of the loans. Until these conditions are reme- 
died, there can be no question of further credits on a material scale 
for any purposes. 105 

In view of conditions in China it may be doubted whether the Con- 
sortium has hindered the flow of capital. If there has been any 
hindrance, this has been beneficial to China, by keeping opportuni- 
ties for malversation away from evanescent governments. But 
hostility still prevails among the Chinese toward international 
schemes for non-productive loans and loans in connection with 
which China would have to deal with groups of nations ; at least 
this was the report brought back from Amsterdam by Sir George 

103 International Chamber of Commerce, Mimeographed Report. 


Macdonogh as a result of the discussions which the International 
Chamber of Commerce had had with the Chinese delegation. 106 
To settle this difficulty (that is, when the time comes for opera- 
tion) it has been suggested 107 that one of the secondary functions 
of the new Bank for International Settlements might be to spon- 
sor the reconstruction of China. The cooperation of the League of 
Nations has also been mentioned. 108 But at this writing the por- 
tents seem remote of the emergence of a Chinese Witte to take 
pride in the size of the foreign debt he has incurred. Though by 
engaging in 1929 a financial commission headed by Dr. E. W. 
Kemmerer to study and report on Chinese finances, the govern- 
ment at Nanking has sought to demonstrate its anxiety to eff ect 
a house cleaning, the military turmoil serves to keep its perform- 
ances a long way behind its genuine desires. 

An interesting offshoot of Chinese hostility to the Consortium 
was the almost overnight appearance of a Chinese banking group. 
Though China is poor in terms of per capita wealth, its size, 
population, and resources insure a collective wealth of no mean 
proportions. This wealth has, however, never been accumulated in 
the modern western manner, for the service either of the state or 
the needs of agriculture. But as the 1894 war indemnity to Japan 
awoke the people to a sense of nationality, so did the Consortium 
awake the banks to collaborate in pooling their resources, not by 
way of response to the welcome to become a member group of the 
Consortium which appears in the Consortium contract, but to 
show the foreigners that the Chinese could finance themselves. 
Mobilized and made patriotic by the Consortium, thirty-two banks 
with resources estimated at $500 million insisted on themselves 
promoting works of benefit to China. Their first operation was 
the Six Million Railway Car Loan for 1921 for direct advance on 
behalf of the Government to foreign providers of rolling stock. 
The stipulation of the lenders was that the revenues designated 
to secure and repay this loan should come under their audit. Two 

ice London Times, November 16, 1929. 

107 Paul Einzig, The Bank for International Settlements, p. 4. 
IDS Wu Ding-chang, International Economic Cooperation in China; Institute of 
Pacific Relations. 


months later the Shanghai Mint Loan ($2,500,000) was nego- 
tiated, the agreement allowing of supervision as drastic as that 
contained in any foreign agreement. In a memorandum accom- 
panying the contract the Chinese bankers outlined procedure to 
be adopted in standardizing the new dollar currency, a much 
needed reform. But the bankers soon realized the hopelessness of 
the task they had set themselves. Perhaps the realization was borne 
in on them the quicker by a default on the railway loan within a 
year through military sequestration of the secured revenues 109 at 
the source. At any rate, after the first exhibition of strength and 
independence, the group publicly recognized their disabilities and 
actually sought to be the intermediary between the Consortium and 
the Government by announcing that "the Chinese Banking com- 
munity may avail themselves of the opportunity of acting in a 
mutual spirit with the new Banking Consortium on such occasions 
and in such matters as are considered proper and favorable." 110 
The birth of the Chinese group was a sign of the times that the 
investment habit with its concomitant of capital concentration is 
rapidly taking the place of the old hoarding tradition which has 
so far prevented China from participating in large-scale financ- 

Government Debt and Business Investments. 

Holdings in the United States of China's foreign debt are com- 
paratively insignificant. It is estimated that the total amount of 
secured foreign loans outstanding on January 1, 1929, upon 
which payments are being made was KH,350,000, 1U say $500 
million, of which the American share was $24 million. In addition 
China has a long list of inadequately secured and unsecured debts 
in connection with which the facts, let alone the redemption, are 
the cause of much dispute between debtor and creditor. 112 Those 
which are partly served are considered inadequately secured, and 

109 Peking and Tientsin Times, February 25, 1922. 

no W. W. Willoughby, Foreign Rights and Interests in China, II, 1046. 

in China Year Book, 1929-30, p. 657. 

112 For list see ibid., 1928, p. 561 if. Discussion in Chinese Economic Journal, 
September, 1929; D. K. Lieu, Foreign Investments in China, Shanghai; Arthur G. 
Coons, The Foreign Public Debt of China 9 University of Pennsylvania Press. 


those in default represent unsecured debt, but such is the confu- 
sion in China's finances that it is impossible to distinguish the two, 
and it is extremely difficult to hazard the total of the outstanding 
obligations, even when all kinds are lumped together. 

For other reasons it is difficult to give a gold dollar equivalent 
of the indebtedness. Problems of conversion arise from the fact 
that foreign loans were contracted and are repayable in many 
different currencies. Again, China's is a silver currency and 
the violent fluctuations in the price of the white metal constantly 
raise or lower China's burdens in terms of gold. How incalcula- 
ble is this factor may be gauged from the experience of the 
American and Foreign Power Company, which in 1929 bought 
the electric power and light property of the International Settle- 
ment in Shanghai. The purchase price of these properties was 
payable in Shanghai taels over a period of five years. At the date 
of purchase the Shanghai tael was equal to 62% cents, at which 
rate the price of 81 million taels had a current dollar value of 
$50.625 million ; but the first payment of nine million taels in De- 
cember, 1929, required a gold outlay at the rate then prevailing 
which made the gold equivalent of the total price $32,028,750, 
or a saving to the buyer of no less than $18,596,250. 118 Until the 
amount is finally liquidated, of course, the cost in gold cannot be 

Subject to these qualifications it may be stated that exclusive 
of the Japanese indemnity (for the Sino- Japanese War of 1894- 
95) and the Boxer Indemnities, China at the end of 1925, when 
the last official figures were compared, had a total debt, mostly 
unproductive, in the region of a billion dollars, 114 of which the 
American share is about $50 million or 5 per cent. International 
discussion on these debts, with the possibility of a consolidation 
arrangement resulting therefrom, awaits the clearing of the politi- 
cal skies. 

Direct foreign private investments in enterprises in China are 
of much greater financial consequence than the government debt. 

us flew York Times, June 6, 1930. 

11* Details in D. K. Lieu, op. cit. f p. 37. 


"It is not improbable," says Professor Reiner, "that these direct 
foreign investments are twice as great as all other forms of for- 
eign investments." 115 Conditions are legally propitious in China 
for this kind of investment because of the prevalence of the extra- 
territorial system, which not only enables entrepreneurs to oper- 
ate establishments on Chinese soil under the laws of their own 
country but affords them continuous immunity from Chinese ju- 
risdiction. Legally, therefore, business investments in China are on 
the same plane as business investments at home. Those enterprises 
represented by manufacturing plants have an advantage over 
their Chinese competitors in respect of freedom from Chinese 
taxation, but, in view of the uncertainty overhanging treaty rela- 
tions and the attitude of the Chinese toward foreign factories, it 
is doubtful whether this advantage will long accrue to the for- 

In spite of these advantages American business investments are 
as insignificant to the total as the American share of the govern- 
ment debt. Exclusive of stock on hand, the total was estimated 
in 1922 at $30 million. 116 In comparison Japan's business invest- 
ments have been computed at 1,809,154,000 yen, or about $900 
million. 117 British investments are even larger than the Japanese. 
In 1927 they were estimated by the British Chamber of Commerce 
in Shanghai at 350 million or about $1,750 million, 118 which, ex- 
cluding holdings of debt, would leave about $1,650 million for 
business investments. 

The paucity of American investments in China is due to several 
reasons : first, to the recency of America's interest in business en- 
terprise abroad ; second, to the fact that though investment is the 
twin sister of diplomacy in China, the United States has been 

us American Investments in China, Institute of Pacific Relations. 

lie Frederic E. Lee, Currency, Banking, and Finance in China, United States 
Department of Commerce, p. 123. Other private estimates give the total up to 
$100 million, inclusive of stock on hand. 

117 Masnoske Odagiri, Japanese Investments m China, p. 4. 

us British Chamber of Commerce Journal (Shanghai), February 6, 1927. Under 
the direction of Professor C. F. Remer a detailed study of the international finan- 
cial and economic relations of China is now in progress under a grant from the 
Social Science Research Council. 


much less continuously zealous in maintaining the relation be- 
tween the two ; finally, until recent times the laws of the United 
States have not encouraged foreign enterprise on the part of its 
citizens. This last-named handicap was peculiarly hampering in 
China, where Americans labored under the necessity, because of the 
lack of federal legislation to meet the peculiar needs of trading in 
China, to incorporate their business either under state laws, with 
their varying and conflicting regulations, or under the British 
ordinances of Hong-kong. Moreover, American citizens abroad 
were liable to pay income tax just as if they resided at home, 
whereas the British companies, for example, were not called upon 
to pay income tax, nor were their shareholders so liable unless they 
received their dividends as residents of the United Kingdom. To 
provide a federal charter for American firms operating in China 
and to put them on a more even competitive basis with other con- 
cerns the China Trade Act of 1922 was passed, and amended in 
1925. It was designed to encourage American investment in China, 
but by this time social disorder had set in, and until 1929 there 
could have been little or no improvement in the totality of Ameri- 
can investment in China. In that year the aggregate received an 
accession through the acquisition by American interests of the 
plant of the Electricity Department of the Shanghai Municipal 
Council. The plant is now run by the Shanghai Power Company, 
in turn controlled by the Far East Power Corporation, a sub- 
sidiary of the American and Foreign Power Company, Inc., which, 
as an earnest of future intentions, announces that it will also be 
the holding company for "such other public utility systems in the 
Far East as may be acquired." 119 Negotiations are also under way 
to transfer the telephone system to an American syndicate. 120 
With the acquisition of these properties the United States would 
have a considerable stake in the future of Shanghai. 

The condition of China has been such as to prevent the new 
international economic position of the United States from showing 
its results in China. If foreign investments in China had grown 
since 1921, the American share would undoubtedly have grown, 

119 New York Times, AprU 13, 1930. 120 Ibid., May 28, 1930. 


and, as in trade, would have grown much more proportionately 
than the total. 

To summarize, the position of American finance in China is 
roughly as follows : 

China's Foreign Debt $1,000,000,000 

American Share of Total Foreign Debt 5% 

American Business Investments in China $ 70,000,000 

Per Cent of British 4.2 

Per Cent of Japanese 7.7 

For comparison: 

American Share of China's Foreign Trade in 1928 14.91% 

American Share of China's Carrying Trade in 1928 2.69% 


THE "problem of the Philippines" involves in the main ques- 
tions between the United States and the inhabitants of the 
islands. They include the nature of the authority exercised by the 
United States and the share of Filipinos in the Government (the 
extent of so-called "Filipinization"), the desire of Filipinos for 
independence and the opposing desire of Americans who profit by 
retention of the islands, the labor difficulties created by the emi- 
gration of Filipinos to the Hawaiian Islands and to the west coast 
of the United States, trade and tariffs, and the reflex action on all 
such issues of the political activities in Congress of the beet-sugar 
producers of Wisconsin and Utah and of the American investors 
in Cuban sugar plantations. The international aspects of the 
problem only, that is to say, the actual or potential relations with 
other countries created by the possession of the islands by the 
United States, are part of American foreign relations, and only 
those aspects of the Philippine problem fall within the scheme of 
the Survey* 

The islands constituting the Philippine group number 7,083 
and comprise 114,400 square miles of territory, 95 per cent 
of which is contained in the eleven largest islands. 2 Most are of 
volcanic origin, and over six thousand are less than one square 
mile in area. With a fertile soil, resulting in some places from 
volcanic ashes and scorial and in others from disintegrated lime- 
stone, an even, mild climate, and abundant rainfall, the Phil- 
ippines have a rich agricultural future. As in the Caribbean 
countries, notably Haiti, 8 a scarcity of modern means of communi- 

1 For a discussion of the domestic problem the reader is referred to William 
Cameron Forbes, The Philippine Islands (1928); Arnold J. Toynbee, Survey of 
International Relations, 1926, pp. 406-438; Maximo Kalaw, Case for the Philip- 
pines; Nicholas Roosevelt, The Philippines a Treasure and a Problem and The 
Restless Pacific; D. R. Williams, United States and the Philippines; Foreign 
Policy Association Information Service, "Philippine Independence," April 80, 

2 These figures and the annotated data regarding population are from the 1918 

See Survey, 1929, pp. 153 ff. 


cation and transportation, difficulties as to land titles, and lack 
of credit facilities have retarded agricultural development. The 
same alternative future faces the Philippines as the Caribbean 
countries: either rapid large-scale development or a progress 
too slow to keep "pace with the appetite for the material ad- 
vantages of life which has been developed in the individual Fili- 
pino under American leadership." 4 

Fish and forests constitute the two great natural resources of 
the Philippines, 53.7 per cent of the total land area being in 
"commercial forest." This is about 90 per cent of the total area 
in forests and is for the most part public domain administered by 
the Bureau of Forestry. The third important natural resource is 
the amount of land suitable for first-class agriculture. Only 12^ 
per cent of the total area is under cultivation, 5 and of the avail- 
able arable land less than 37 per cent is farmed. The wide range 
of latitude which the Philippine Islands cover, equal to that from 
the Gulf of Mexico to Canada, gives a large scope for the agri- 
cultural products which can be grown, but this very extent is a 
hindrance to progress; the islands are so scattered and inter- 
island communication so little developed that isolation makes any 
form of instruction difficult. After years of fruitless efforts, the 
Department of Commerce learned that the best way to help the 
native was to go to his small farm, demonstrate the use of mod- 
ern machinery and teach him to grow more staple products. If 
irrigation projects were undertaken, for which there is sufficient 
water, not only would the quality of crops be improved but the 
growing season could be made continuous throughout the year. 

The Filipinos desire that their land be cultivated and slowly 
developed in small fee holdings, not by corporations or by a land- 
lord and tenant system, either of which would reduce the culti- 
vators to a state of social dependence. Individual citizens of the 
Philippines or of the United States (or with the express authori- 
zation of the Philippine legislature, citizens of countries which 

4 Annual Report, Chief of the Bureau of Insular Affairs, 1929, p. 10. 

5 The Philippine Islands, A Commercial Survey, United States Department of 
Commerce (1927), p. 42. 


grant to Filipinos the same rights to acquire land as to their own 
citizens) may purchase up to 144 hectares (355 acres) of public 
agricultural land ; and United States or Philippine corporations, 
of which 61 per cent of the capital stock is owned by Americans 
or by Filipinos, may purchase up to 1,024 hectares (2,530 
acres). 6 

As cooperation in some agricultural projects comes to be rec- 
ognized as desirable it will probably be by "a large number of 
landowners, grouped about a central agency which finances and 
coordinates the central activities, rather than by large holdings 
in fee , . . by individuals or corporations." 7 The production of 
high-grade sugar being dependent upon efficient management and 
milling, large centrals are already being developed which greatly 
increase output. 

Strategic Location. 

The northernmost island is only sixty-five miles from For- 
mosa, the southernmost Japanese possession. To the southwest 
Palawan and the Sulu archipelago carry a discontinuous land 
bridge to within twenty miles of the British part of North Borneo. 
Multitudinous Dutch islands "o'erlace the sea" to the south and 
southeast, stretching on toward the coast of Australia ; and, over 
an arc of forty-five degrees, the mosquito swarms of the Japanese- 
mandated Pelew, Mariana, Caroline, and Marshall islands are 
scattered to the east along the sea path between the Philippine 
and Hawaiian islands. Thus in the apprehensions of the naval 
strategist the islands "threaten" their near neighbors and are 
"threatened" in turn. From the point of view of naval strategy 
alone, the Philippines might even be considered as a gate lying 
athwart the great seaway between India and the Pacific Ocean. 

In their relation to the Asiatic mainland the Philippines are 
a series of links in the long chain of islands that shut in the 
Asiatic seas from frozen Kamchatka down to the Malay Peninsula 

Public Land Act, Act No. 2874, Section 23, of the Philippine Legislature ap- 
proved November 29, 1919, as amended by Act No. 3219, Section 3, approved 
January 19, 1925; publications of the Bureau of Insular Affairs. 

7 Annual Report, op. cit., pp. 10-11. 


as a log boom shuts in a harbor, guarding the Pacific access of 
Russia and China; all the islands are Japanese save the Philip- 
pines, and these control the entrance to the South China Sea, con- 
stituting a geographic factor in aid of the open door policy in 

The following table gives the distances from Manila to various 
foci of communication in the Pacific, in terms of mileage, steaming 
time in days, and probable flying time at the rate of one hundred 
miles per hour. 8 The last may be important in a future in which, 
as Nicholas Roosevelt points out, 9 the islands of the Pacific may 
be the stepping stones of aviation between the American and 
Asiatic continents. 

Distances from Distance in Steaming time Flying time 

Manila to miles in days in hours 

Batavia, Java 1,795 11 17.9 

Guam, Marianas 2,006 7 20.1 

Hong-kong, China 727 2 7.3 

Honolulu, Hawaii 5,607 20 56.1 

Melbourne, Australia 5,214 20 52.1 

Nagasaki, Japan 1,504 4 15.0 

Pago Pago, Samoan Islands 5,188 27 51.9 

Panama, Canal Zone 10,764 30 107.6 

San Francisco, California 7,164 26 71.6 

Seattle, Washington 6,923 23 69.2 

Shanghai, China 1,338 6 13.4 

Singapore, Straits Settlement 1,578 5 15.8 

Wei-hai-wei, China 1,725 7 17.3 

Yokohama, Japan 2,023 15 20.2 

The Island People. 

The estimated population in 1928 10 was 11,921,600, of which 
the majority are brown-skinned Malayans, a blend of the Mon- 
goloid and Indonesian types. As the successive invasions of the 
Philippines covered several centuries the people exhibit marked 
differences in language, manners, customs, laws, and degrees of 
civilization. The effects of Hindu, Mohammedan, and Japanese 
contacts are more evident in the culture than in the stock. Of 
pure-blood Chinese there are some 45,000, and of Japanese about 

s Distance in miles here indicates direct mileage. The steaming time is based 
on present steamship service which in several cases is by indirect route. 
The Restless Pacific (1928), op. cit., p. 26. 
10 Commerce Yearbook, 1920, I, 691. 


8,000. Of the non-Filipino races there are over 6,000 United 
States citizens, about 4,000 Spanish, and perhaps 3,000 "others." 
A substantial number of Chinese "mestizos," and of Spanish 
"mestizos," perhaps 8 per cent of the whole, are to be found, par- 
ticularly among the wealthier and better educated classes. 

About 55,000 of the prehistoric types remain, living only in 
Luzon, Mindoro, Visayas, Palawan, and Mindanao, on the for- 
est-clad slopes and higher interiors to which they were driven by 
the Mohammedan invaders. Including the frizzle-haired, dark- 
skinned Negritos, the straight-haired Mongoloid type called 
"Proto-Malays," and a curly-headed type combining the charac- 
teristics of aboriginal Australian and Japanese Ainu called 
"Australoid-Ainus," they are classified as "pygmies" in the census 
of 1918. Their physique is poor, their vitality and intelligence 
low. In Mindanao about 116,000 Indonesians dwell. Tall, well- 
developed, and light-colored, they are physically superior to the 
rest of the islanders; many of them have warlike characteristics, 
though they are becoming more pacific. 


Lack of homogeneity arises also from the inadequate land and 
water communications among the widely scattered groups and 
from the many different languages and dialects spoken. At least 
seven main languages, differing as much as do western European 
tongues, and no less than eighty-seven distinct Malay dialects are 
current. Spanish, which introduced the Roman alphabet and was 
once the language of general communication, of education and 
business, and is still used by most newspapers, is gradually being 
encroached on by English, which is taught in the public schools, is 
the language in which instruction is given in the University of the 
Philippines and with Spanish is used in the government offices, the 
legislature and the courts; after twenty-five years of American 
occupation the number of English-speaking natives has doubled. 
The literates in the population, 11 approximately 20 per cent in 
1903, increased to over 49 per cent in 1918, but of those able to 

11 The census figures for literacy are based on literates of native Christian 
population of ten years or over, Census, 1918. 


read and write the number who do much of either is extremely 
low. The Monroe Commission of 1925 reported 530,000 as the 
approximate number of pupils who had finished the primary 
grades of the public schools. 


The Philippines are the only community of Christianized 
Asiatics under the jurisdiction of a western power. According 
to the Wood-Forbes report of 1922 the population then com- 
prised 25,568 Buddhists, 540,054 "pagans," 434,868 Moham- 
medans, and 9,350,240 Christians, including the Aglipayans. 
This church takes its name from Monsignor Gregorio Aglipay, a 
native bishop of the Catholic faith. While accepting the doctrines 
of the Church of Rome, Aglipay and his followers became es- 
tranged from the hierarchical organization. In consequence of 
the general native hostility to the friars, he was able to organize 
a sect on this basis, and by 1905 claimed four million converts. 
Handicapped by a lack of educated bishops and priests, by legal 
inability to take over the churches in which the Filipinos were 
accustomed to worship and the images (such as Santo Nino of 
Cebu, and the Virgin of Antipolo, which were the objects of 
popular veneration), and by the poverty of its members, the 
church declined and seemed on the way to extinction, but a revival 
of activity took place and in 1918 it numbered 1,417,448, con- 
stituting 13.7 per cent of the entire population. 12 

Early History. 

Records of early Philippine history once existed in native 
character (syllabaries of Indian origin). Zeal for the Christian 
faith led the Spanish priests to destroy these native writings as 
works of the devil, as was likewise done in Mexico and Peru ; so 
much is known from the boasts of the priests themselves. A simi- 
lar damage to the world's knowledge of early China had the 
emperor Shih Huang Ti wrought in 213 B.C. when he caused the 
destruction of all books of Confucius on the ground that the slav- 

12 See Frank C. Laubach, The People of the Philippines (1925), chap. ix. 


ish following of ancient customs and traditions prevented the 
progress of the empire. Fragments of early Philippine history are 
found in the records of Java and of the mainland countries. 

The Indians were in the Malay archipelago before the Chris- 
tian era, the Chinese in the third and fourth centuries, and the 
Arabs visited it not long after. A Buddhist Kingdom was estab- 
lished in Sumatra which extended into a considerable empire, but 
declined with the rise of the Javanese Brahman empire of Madja- 
pahit ; both included North Borneo, to which some of the Philip- 
pines were subject or paid tribute. The islands seem to have been 
governed by the Ming emperors of China in the fifteenth century, 
and for a hundred and twenty-five years northern Luzon was 
subject to Japan. There is evidence that from 1372 to 1752 some 
of the islands paid tribute to China. Marco Polo in 1260 tells of 
"Saracens" in the Malay archipelago, and these Arabs voy- 
agers, merchants, and religious teachers expanded into the 
Sulu archipelago about 1300. There the Spaniards found them 
in the sixteenth century ; Moors and Christians, who had been at 
each other's throats for eight hundred years in northern Africa 
and Spain, fought each other again as Moro and Conquistador 
in the Sulu sea. 

In the fifteenth and sixteenth centuries the era of discoveries 
by Portuguese and Spaniards (among whom an adventurer like 
Magellan, a Portuguese by birth, might be found in the employ 
of Spain) the new world was by various agreements and by De- 
marcation bulls of Pope Alexander VI divided between Portugal 
and Spain. The Philippines fell within the Portuguese area ; yet 
at that time so inexact were geographical knowledge and the calcu- 
lation of longitude that these islands, named St. Lazarus by Ma- 
gellan, were believed to be in the half of the world allotted to 
Spain; Spanish seamen explored and conquered them, renamed 
them after Prince Philip, began colonization and introduced a 
commerce with Mexico and South America which expanded with 
great rapidity. 13 

The Dutch too had contacts with the Philippines. Their first 

is The union of the two kingdoms in 1581 averted the possibility of a struggle 
for possession. 


expedition, in 1595, returned from the East in 1597 bringing a 
treaty with the Sultan of Bantam ; another, which went to South 
America for trade and plunder, then on to the East touching at 
the Philippines, returned to Rotterdam in 1601 after circum- 
navigating the globe. In 1602 the Dutch East India Company 
became bankrupt; it was dissolved in 1798, and in the course 
of the Napoleonic wars, the control of Java passed to England 
for a time. During the Seven Years 5 War, 1756-63, the British 
took Manila by assault, setting free the Sultan of Sulu who was 
a prisoner there, overran south Luzon and the Visayas, incited 
rebellion in north Luzon, and by these operations impaired the 
prestige of Spanish military power, which continued nevertheless 
to hold the natives in check until dislodged by the Spanish- Ameri- 
can War. 

In the nineteenth century the European neighbors of the 
Spanish in the Pacific islands were the British, Dutch, Portu- 
guese, French, and Germans. The British holdings in 1905 com- 
prised about 53,400 14 square miles not counting New Hebrides 
over which Great Britain holds a joint protectorate with France. 
The Dutch colonies covered 733,000 square miles, the Portuguese 
7,330 square miles, the French 10,000, outside of the New Heb- 
rides, 15 and the German 96,000 square miles. 10 The superiority 
of the administration of many of these possessions over the co- 
lonial rule of the Philippines by Spain did much by contrast to 
provoke the hostility of the Filipinos to their Spanish masters. 

The overthrow of the shameless Queen Isabella II in 1868 
brought liberals into power for a short time and gave the Fili- 
pinos a taste of liberal government ; the reaction produced by the 
return of the Spanish conservatives to power was therefore all 
the more obnoxious. The first aspiration of the Filipinos was only 
to receive the same treatment as that meted out to the provinces 
of Spain, but the Spanish administrators, mistakenly assuming 
that independence was the goal, engaged in repressive measures, 

i* This does not include Australia and New Zealand or their dependencies, 
is The value of the trade of the French possessions is much greater than their 
area would be thought to produce. 

ie N. D. Harris, Europe and the East (1926), pp. 589-591. 


suppressed meetings, persecuted popular leaders, and punished 
the innocent; at the same time, in order to profit by the friars' 
long experience and authority, the Spaniards took them into con- 
fidence and caused the islanders to begin to consider the friars 
as their real and harsh masters. The usual sequence of open pro- 
tests, repressions, secret organizations and conspiracies, execu- 
tions and a reign of terror, and finally open rebellion ensued. 
Before the American arrival at Manila, the Spanish had 
obtained a truce with the revolutionary leader, Aguinaldo, but it 
was only a lull in a continuous struggle, and immediately after the 
destruction of the Spanish fleet Aguinaldo crossed over from 
Hong-kong, landed at Cavite, and with the aid of the Filipino 
militia, which promptly rebelled against Spain, invested Manila 
on the land side. 

Acquisition of the Philippines by the United States. 

Although the opening of the Suez Canal in 1869, in conjunc- 
tion with the establishment of steam communication in the Pa- 
cific, had brought the Philippines into the world of organized 
commerce, the United States Government had not thought out its 
policy for the Pacific area when the war with Spain brought these 
islands within its grasp. Commercial treaties had been signed 
with Hawaii, 1849, Samoa, 1878, and Tonga, 1878, by which 
American mail steamers were provided with ports of call. The 
United States had not concerned itself further with Far Eastern 
affairs, neither participating in the partition of China nor pro- 
testing against it. 

But war forces the prompt taking of many decisions. The 
naval engagement of May 1 in Manila Bay began operations 
which ended with the capture of Manila on August 13. "By 
a morning's battle," said Dewey, "we had secured a base in the 
Far East at a juncture in international relations when the par- 
celling out of China among the European powers seemed immi- 
nent." 17 With Manila in hand as a base for naval operations and as 
a door into the China market, and mindful of the reports already 

IT Autobiography of George Dewey (1913), p. 260. 


made from investigations as to the strategic, mineral, and com- 
mercial value of the Philippines, President McKinley's idea of 
America's place in the divine order enlarged : 

. . . the war has brought us new duties and responsibilities which 
we must meet and discharge as becomes a great nation on whose 
growth and career from the beginning the Ruler of Nations has 
plainly written the high command and pledge of civilization. 18 

In early June the Philippines, with the exception of a port and 
necessary appurtenances to be selected by the United States, were 
to remain with Spain. By the middle of the month the Filipino 
insurgency was thought to change the situation, and in July Hay 
noted that Great Britain preferred that the Philippine Islands 
be retained by the United States; if this were not done Great 
Britain would insist upon an option in case of sale. The Armistice 
Agreement of August 12, 1898, left the Philippine question 
open, and the American Peace Commissioners were divided ; three 
were avowed expansionists and were for permanent acquisition, 
two were against it. The instructions to the delegation covered 
the point of trade: "incidental to our tenure in the Philippines 
is the commercial opportunity to which American statesmanship 
can not be indifferent"; 19 this Senator Lodge thought required 
us to hold "possessions on both sides of the Pacific Ocean for the 
protection and furtherance of our trade interests. 5 ' 20 

China seemed about to be dismembered, and the great Powers, 
alarmed though they were at the probable consequences, were im- 
potent to stop the process. In Hong-kong Great Britain had a 
wedge to keep the door open for the open door policy. The United 
States lacked any such pied a terre, but in Manila it would have 
a point of vantage whence it could assert its influence on the poli- 
cies of the Orient. Although first instructions to the American 
delegates at Paris were for the cession of Luzon only, the Presi- 
dent later telegraphed for the cession of all the islands. To the last 
Germany did not give up hope of picking up some "compensa- 
tion," and by a secret agreement induced Spain to sell its part of 

is Alfred L. P. Dennis, Adventures in American Diplomacy (1928), p. 82. 
i*> For. ReL, 1898, p. 907. 2 N. D. Harris, op. ciL, p. 603. 


the Caroline group; Germany also obtained the consent of the 
United States to its acquisition of the Carolines, Pelews, and 
Marianas (except Guam) in return for its waiver of all claim to 
the Sulus. 21 The outcome was satisfactory to Japan. It had pro- 
tested against United States annexation of Hawaii but in 1898, 

. . . the feeling now, as expressed in the public press, as also in 
other ways, seems to be quite universal in Japan that the United 
States should take, possess and govern the Islands in the interest 
of peace and commerce and to insure good government, with the 
moral support, at least, if not the active cooperation, of Japan and 
Great Britain. Any desire that the Japanese may have had for the 
possession of the Islands seems to have been now almost, if not 
wholly, lost. 22 

When the United States decided to force Spain to sell the 
Philippines, Japan accepted the new status without visible un- 
easiness. It remained only to liquidate the situation with the 
Filipino insurgents who, misunderstanding the purpose of the 
United States, had come to expect full independence of the 
islands under a native government. Two years of fighting ended 
with the capture of Aguinaldo, the deportation to Guam of the 
most irreconcilable leaders, and the payment of a cash bonus for 
each surrendered firearm. The Filipinos found themselves in the 
position of the astonished Greeks in Rhodes and the Dodecanese 
after the permanent occupation of those islands by Italians in 
the Italo-Turkish war of 1911. Another obstacle to American con- 
trol was removed when with the aid of the Sultan of Turkey as 
Khalif of the Mohammedan world, the Moros under the Sultan of 
Sulu were induced to assent to United States rule. 23 

Over one island, Palmas, the claim of the United States was 
ended by arbitration. With an area of less than two square miles 
and only 750 people, Palmas has neither strategic nor economic 
value; it is one of a large number of insignificant islands, still 
little known, and so much difficulty was found in identifying 

21 Die grosse Politik der europaischen Kabinette (1871-1914), XV, 82, 95-9T. 

22 United States Legation at Tokyo to the State Department, August 13, 1898. 

23 For reference see Dennis, op. cit., pp. 98, 91. 


some of them "... that the arbitrator resourcefully suggested 
that they might have disappeared in one of the earthquakes 
which frequently occur in those regions." 24 Palmas lies about 
forty-eight miles southeast of the nearest point of Mindanao. 
Beyond it, fifty-four miles away in the same direction, are islands 
known as Nanusa or Meangis belonging to the Netherlands. By 
the Treaty of Paris of 1898 Spain purported to transfer title 
to Palmas to the United States ; its claim had been based on the 
theory of discovery by Spain and Portugal, on recognition by 
treaty, and on contiguity. Netherlands based its claim on the 
assertion of peaceful and continuous display of authority over 
the island, beginning with contracts of suzerainty between native 
chieftains in 1676 and the Dutch East India Company. 

The arbitration was agreed upon pursuant to a clause in the 
general arbitration treaty existing between the parties (one of 
the so-called Root treaties), and the tribunal employed was the 
Hague Permanent Court of Arbitration pursuant to agreement 
that there should be a single arbitrator. M. Max Huber of Swit- 
zerland, then also President of the Permanent Court of Inter- 
national Justice, was chosen as arbitrator. His decision was to 
the general effect that according to the evidence the Netherlands 
had exercised sovereignty over the island between 1700 and 
1906 ; though not numerous these acts were sufficient in number, 
were continuous, peaceful, and open, and were exhibited more in- 
tensively in the years immediately preceding 1898, and there 
was no evidence establishing any display of sovereignty over the 
island by Spain to counterbalance the manifestations of Dutch 

On January 2, 1930, the United States and Great Britain 
signed a convention defining the boundary line between the 
Philippine Archipelago and North Borneo 25 and confirming in 
the United States the eight small Turtle islands with a popula- 
tion of two hundred ; administration of these islands is to be con- 

2* Philip Jessup, "The Palmas Island Arbitration," American Journal of Inter- 
national Law, XX, No. IV, p. 78d. 
25 New York Times, January 3, 1930. 


tinued for a time by the British North Borneo Company. This 
convention will be submitted to the Senate. 

The Significance of the New Acquisition. 

The possession of the Philippines very soon influenced Ameri- 
ca's role in the Far East ; its regiments in the islands enabled the 
United States to send an important contingent to Peking in the 
Boxer affair of 1900, and this sharing of responsibility in turn 
gave it a standing at the peace negotiations of that year to protest 
against the severe terms of the great Powers. This prestige made 
possible negotiations by President Roosevelt in 1905 for the 
settlement of the Russo-Japanese War. 26 

In acquiring the Philippines the United States crossed the 
dividing line between continental expansion and colonial enter- 
prise. In its progress to the Pacific it was still engaged in occupy- 
ing the land of its inheritance and its own citizens were still more 
than conquerors, they were pioneers and settlers. The Rubicon of 
imperialism was crossed when the United States carried its flag to 
a distant land inhabited by alien peoples, where its citizens must 
remain a dominant minority over the races of another and less ad- 
vanced civilization. Here the United States must assume the role 
of a political missionary, and thus accept principles hitherto for- 
eign to its spirit and development the imperial role of the Eu- 
ropean nations, proclaiming its stewardship and its share of the 
"white man's burden" and justifying the tutelage of primitive 
races in the name of the higher civilization whose blessings and 
other concomitants it imposes upon them. 

In reaching out to the Philippines, the United States went to 
Europe by way of the Far East. Asia and Europe are not less 
involved with each other now than when the union of Spain and 
Portugal in 1581 caused Holland to lose the Portuguese trade 
and the Dutch sailed to the East Indies to make good that loss ; 
or when Great Britain became an ally of Japan in 1902 in order 
to check the movement of the Russian glacier toward southern 
Asia; or when Germany in 1904 encouraged Russia to embroil 

26 See pp. 43-44. 


itself with Japan in Manchuria in order that France might lack 
Russian support in the first of the Moroccan crises. 

The International Nexus of Economic Interest. 

Dutch fears for the security of their East Indian possessions 
have become acute when European crises 1830, 1848, 1867 
(Franco-Prussian dispute over Luxemburg), 1870, and 1914 
shook the seamless web of international politics. With sporadic 
efforts toward military defense e.g., some fortifying in 1899, 
and bills in the Netherlands Parliament in 1920, 1924, and 1925 
for naval increases which failed of passage, of which the last 
aimed at the creation of a "neutrality fleet" the Netherlands 
had come to the formulation of the following "principles of de- 
fense" which were communicated by the Government to the 
Indies Volksraad in 1927 : 

1. The maintenance of Netherlands authority in the Archipelago 
against disobedience and rebellion. 

2. The execution of Holland's military duties, as a member of the 
League of Nations, towards other nations, which task apart 
from cooperation in the carrying out of military sanctions of 
the League with all available means is confined to the preserva- 
tion of strict neutrality in conflicts between other Powers. 

The basis of these principles was a conclusion of the home Parlia- 
ment that "the work of Geneva renders undesirable a definite 
plan of defense extending over a great number of years." 27 This 
sense of international security created by the growth of League 
influence has a concrete reinforcement in the British interest, 
backed by Singapore and the British fleet. The iron and oil of 
Borneo, the Celebes, Sumatra, and Java combine with the British 
resources of men and material to the common advantage of both 

The bearing of Philippine trade on the international relations 
of the United States may be found in the direct benefit which the 
United States derives from it or in the vantage in the China trade 

27 Lieut. Gen. H. Bakker in the Asiatic Review, July, 1929; p. 431. 


which possession of the Philippines may be thought to secure to 
the United States. The Philippines have already become the third 
largest market for United States products in the Orient, and as 
a potential source of crude rubber, raw silk, coffee, and sugar 
which constitute one-half of United States foreign purchases 
and of sisal and camphor, two articles following closely in im- 
portance, they may be considered of even greater value. 

Although the United States was insisting on the open door 
policy in China, and had agreed in the Treaty of 1898 to give 
Spain equality of treatment in Philippine ports for ten years, 
the tariff which took effect November 15, 1901, offended against 
the spirit of the open door declarations. By the Act of 1909, 
passed as soon as the ten-year period had elapsed, and the Act of 
1913 a tariff wall was erected against other countries ; American 
goods enter the Philippines duty free. Thus from taking but 7 per 
cent of their imports from the United States in 1899, the Philip- 
pines took 40 per cent in 1910, and with some fluctuations have 
taken a steadily increasing proportion, reaching 63 per cent in 
1929. 28 Japan comes next in Philippine imports with 8 per cent, 
and China, Great Britain, and Germany follow in order. Philip- 
pine articles which do not contain more than 20 per cent of foreign 
material, if shipped direct, enter the United States free. Three- 
fourths of Philippine exports (as compared with 26 per cent in 
1899 and 42 per cent in 1910) come to the United States; sugar 
exports to the United States have increased from 26 per cent of 
the total value of sugar exported in 1899 to 96 per cent in 1928. 29 
To the United States the islands send sugar in steadily increasing 
quantity, cocoanut oil, copra, tobacco, abaca or manila hemp, 
maguey or aloe gum, and embroideries, and to Japan hemp, lumber, 
and maguey. Hemp, once produced in quantity only in the Philip- 
pines, is now cultivated to some extent in the Dutch and British 
East Indies. Of total trade 69 per cent is with the United States 
against 16 per cent in 1899. Philippine trade with Great Britain 
decreased from 8 per cent in 1919 to 4.76 in 1928, and with 

28 Bureau of Foreign and Domestic Commerce, Far Eastern Series, No. 94, 
March 15, 1930. 

29 Annual Report of the Insular Collector of Customs, 1929. 


Japan from 8 to 6.68 per cent. Philippine foreign trade in 1928 
was as follows : 80 

Total import and export trade $289,712,000 

United States $199,444,000 

France 4,268,000 

Germany 7,779,000 

Italy 1,867,000 

Netherlands 2,000,000 

Spain 6,020,000 

Switzerland 1,673,000 

United Kingdom 13,552,000 

British East Indies 4,174,000 

Netherland East Indies 3,344,000 

French East Indies 2,451,000 

China 10,064,000 

Hong-kong 1,697,000 

Japan 19,904,000 

Australia 3,061,000 

All other 8,414,000 

The hopes of southern senators, who in the debates over the 
treaty of 1898 and in the succeeding presidential campaign 
argued for retention of the Philippines to serve as a market for 
cotton, have been realized, the Philippines now constituting the 
second largest foreign market for United States cotton piece 
goods. Of the cotton and its manufactures which constitute 20 per 
cent of Philippine imports, 54 per cent comes from the United 
States. From the United States the Philippines receive also wheat 
flour, iron and steel manufactures, such as rails, tools, machinery 
and automobiles, and mineral oil ; with a production of only 60,- 
000 tons of coal a year the islands are obliged to import more 
than 500,000 tons for their railways and industries. 

In 1928 United States vessels led in the value of merchandise 
carried to and from the Philippines, with 45.5 per cent, although 
Great Britain had 412 vessels entering the islands with a total 
tonnage of 1,493,001 against 232 American with a tonnage of 
1,212,791 ; German ships were third in number and tonnage and 
fourth in value of goods, and Japanese were fourth in number 
and tonnage and third in value of goods. British ships carried 32 
per cent in value of the total merchandise, Japanese, 6.96 per 

so Commerce Yearbook, 1929, I, 697. 


cent, and German, 4.9 per cent. In the carrying trade between 
the Pacific Coast of the United States and the Philippines the 
United States is supreme, but for Atlantic Coast ports of the 
United States British ships offer a keen competition. 

The total bonded indebtedness of the Philippine Government as 
of June, 1930, amounted to $75,098,500. The balances in sinking 
funds as of November 30, 1929, amounted to $12,661,225; this 
balance has recently been reduced by the cancellation of $4,503,- 
000 face value of Philippine government bonds formerly held in 
the sinking funds. 31 

The total investment of American firms in the Philippines is 
$276,511,000. Of the 101 American concerns doing business in 
the Philippines, 39 are in industry and manufacturing with an 
investment of $153,956,000. Of the 78 English firms, 71 are in 
commerce with an investment of $493,303,500; all of the 26 
German and 11 Japanese firms have their investments in com- 
merce, $87,243,000 and $65,552,500, respectively. 32 The rail- 
way, telephone, and electric companies are controlled and man- 
aged by American corporations. Chinese control most of the retail 
trade and are influential in the interisland and foreign commerce, 
about 30 per cent of the Chinese population being engaged in 
commerce. Nearly 65 per cent of the sales tax is collected annually 
from Chinese merchants. 33 The lumber concessions, twenty-year 
license agreements, are evenly divided between Chinese and Ameri- 
cans, five each, the one Filipino concession having been sold to a 
Chinese in 1928. 3 * 

The foreign trade of the neighbors of the Philippines may 
be considered for its bearing on the foreign trade of the Philip- 
pines. The tables of Netherland East Indies, British East Indies, 
and French Indo-China foreign trade for 1927 with the prin- 
cipal countries are as follows : 35 

si War Department, Bureau of Insular Affairs, Communication, June 2, 1930. 

32 R. W. Dunn, American Foreign Investments (1926), p. 166. 

33 Ta Chen, Chinese Migrations, with Special Reference to Labor Conditions 
(Washington, D. C., 1923 )', p. 97. 

34 Annual Report of the Governor General of the Philippine Islands, 1928, 
p. 176. 

35 Commerce Yearbook, 1929, II (Foreign Countries), p. 470. 



Imports Exports 

Total $349,652,000 $651,777,000 

United States 10.6% 13.3% 

Netherlands 17.2% 17.4% 

United Kingdom 12.1% 9.6% 

Singapore 13.6% 22.0% 


Imports Exports 

Total $570,484,000 $599,003,000 

United States 3.6% 43.7% 

Netherland East Indies 35.9% 9.8% 

United Kingdom 13.6% 14.9% 


Imports Exports 

Total $105,286,000 $116,868,000 

United States 2.9% 1.1% 

France 47.2% 20.3% 

Japan 2.5% 9.9% 

While the Dutch produce almost all the world's quinine and 
most of the camphor, it is obvious that the large exports from the 
British and Dutch East Indies represent rubber shipments from 
the best producing areas of the world to the United States which 
owns three-fourths of the world's automobiles and in 1928 con- 
sumed about 62 per cent of the world's output of rubber. 37 Ameri- 
can imports of crude rubber in 1928 were (in thousands of 
dollars) : 88 

British Malaya 138,012 

United Kingdom 28,930 

Ceylon 20,814 

Other British East Indies 609 

Netherland East Indies 49,042 

Brazil 5,148 

Continental Europe 1,379 

All other countries 922 

Total 244,856 

The theory that each sovereign state should be completely self- 
contained and that international exchanges should be unnecessary 

36 Commerce Yearbook, 1929, II, 360, 435. 

d., I, 475. **Ibid. f p. 470. 


has led to a demand for the development of the Philippines as a 
rubber plantation to supply the United States market; 89 it is 
argued that the Filipinos themselves would benefit by the in- 
creased opportunity for employment as laborers. But this form 
of capitalistic development is not acceptable to the Filipinos; 
American large-scale producers have accordingly sought other 
areas where native policy is either more hospitable or less articulate 
and forceful. 

39 According to the Philippine Trade Commission at Washington, in 1928 the 
Philippines exported 814 tons of rubber valued at $200,000. Of this amount 175 
tons came to the United States. 



THE sprinkled isles and glittering sea stretches of the Pacific 
are much more the property of the romancer than of the an- 
nalist, and copra, sandalwood, and mother-of-pearl seem not so 
much commodities in trade as the essential stuff of adventure. The 
region belongs to the story-tellers Melville, Stevenson, and Con- 
rad. Even the accredited history of the Pacific is a romance. 
Fernao de Magalhaes, who named El Mar Pacifico and died ob- 
scurely in the Philippines; the discoverers, the Dons of stately 
names Vasco de la Rocha, Alvaro de Saavedra, Ruy Lopez de 
Villalobos, Alvaro Mendafia de Neyra fluttering Portuguese 
and Spanish pennons from their stately galleons; the sixteenth- 
century sea libertines, English and Dutch, Drake, Cavendish, and 
Van Noort, who harried the Spanish with the devil-may-careness 
of buccaneers ; even Captain Cook of the eighteenth century who 
met Magellan's fate in the "Sandwich Islands" all these are epi- 
cal and invested with some heroic quality, not plain actors in his- 
tory. In the same way the name of Pitcairn Island seems not so 
much that of a British possession in the south Pacific as a symbol 
of conditions in the eighteenth century and of the astonishing ad- 
venture of H.M.S. Bounty; while the penal settlement of New 
Caledonia, and the Solomon Islands, suggest not so much the his- 
torical events by which they became European colonies as the 
incidents which take place under diverse "civilizations" the 
"civilized" jungle and the primitive in which men prey on each 

Imagination feeds upon the immensity of the sea, everywhere 
tilted upward to the delicate blur of the horizon; on the endless 
murmur of long rollers crisping on the white sand of low atolls, 
their foam tricking out the blue sea floor like the cirri floating 
over the infinite upper blue; on the black-green of the Philip- 
pines and the ravines that gash the peaks of New Guinea. A 
typhoon mingles sea and sky like a volcano of the air; squalls 


drop a shutter of night on the ocean with a rain so heavy that it 
beats upon the eyelids ; a new volcanic islet bursts with tropical 
passion out of the sea floor, or a Krakatoa detonates into dust and 
is blown around the world. 

In the picture are tawny Polynesians, erect and noble-looking, 
docile and friendly, and negroid Solomon Islanders, squat and 
fierce, among whom still exist customs surviving from head-hunt- 
ing and cannibalism. There are missionaries, whalers, deserters, 
and mutineers, wasters and riffraff on the beach, and all the 
nameless savageries of "white 53 men holding the brown and the 
chocolate-colored at their mercy in those wide silences. 

The area is, nevertheless, the setting of international relations 
shared by many states; discovery, occupation and conflicting 
claims, sparse colonization by white people, development and ex- 
ploitation of natural resources, maneuvering for markets the 
scene, in short, of the politico-economic problems created by the 
restless energy of man which, always a characteristic of "civiliza- 
tion," has become intensified and accelerated by the conditions of 
the mechanical and industrial era. An outline of the setting of 
these problems and of their historical background is therefore 
suitable material for the Survey. 

Counting an atoll archipelago as a single group, the islands and 
separate groups charted opposite page 274 number about 2,650. 
They are mostly of coral formation or of volcanic origin; new 
volcanoes occasionally appear, and some are still active in Hawaii 
(Kilauea), Tonga, the New Hebrides, the Solomon Islands, and 
Bismarck Archipelago. The natives consist mainly of three race 
groups: the earlier, very dark or "black" Melanesians, of whom 
the Papuans are an example, woolly-haired, thick-lipped, negroid, 
called aboriginal; the later or migrant Polynesians, tall, well- 
proportioned folk with light-brown skins, regular, often hand- 
some features, and responsive in temperament; and the dark, 
often stunted Micronesians, people of Malay stock modified by 
Polynesian crossings and late Papuan, Chinese, and Japanese 

The following table indicates the tremendous decrease in native 


population of the Pacific islands during the last fifty years and 
the small proportion of whites to Asiatics. 1 


Natives, 1870 690,000 

Natives, 1920 200,000 

Whites, 1920 37,000 

(exclusive of New Zealand) 

Asiatics, 1920 145,000 


Natives, 1870 3,060,000 

Natives, 1920 1,020,000 

Whites, 1920 28,000 

Asiatics, 1920 66,000 


Natives, 1870 273,000 

Natives, 1920 91,000 

Whites, 1920 360 

Asiatics, 1920 13,000 

The islands of the Pacific were at first regarded as important 
sources of raw materials, but with the exceptions of the Philip- 
pines and the Dutch East Indies are now esteemed as commercial 
assets of only moderate value. A higher strategic value is attrib- 
uted to them in the commercial sense as providing an approach to 
the mainland and thus affording an opportunity for participation 
in the trade of eastern Asia, thought to present unlimited market 
possibilities. 2 

European Rivalry In the Pacific. 

Since the arrival of Europeans these islands have had almost no 
history of their own ; subject to European colonization, their des- 
tiny in many instances has followed political events in Europe it- 
self : their territories have been transferred as a result of or as an 
offset to European transactions; the slave trade was ended be- 
cause of agitation against it in Europe ; their commercial develop- 
ment as sources of raw material and as markets has been measured 
by European demand, and such protection and blessings as they 

^Problems of the Pacific (1927), p. 230. These figures are of course approxima- 
tions, but there is no doubt as to the steady decrease of the native populations. 
2 See Isaiah Bowman, The New World (1928), pp. 55, 614. 


have received have also depended upon the advance of enlightened 
sentiment in Europe. 8 

Benjamin Kidd's characterization of conditions is still valid. 4 
Remarking that civilization has tended to spread outward away 
from the tropics and has been most marked in the temperate 
zones, he said : 

There never has been, and there never will be, within any time with 
which we are practically concerned, such a thing as good govern- 
ment, in the European sense, of the tropics by the natives of these 

It will probably be made clear, and that at no distant date, that 
the last thing our civilization is likely to permanently tolerate is the 
wasting of the resources of the richest regions of the earth through 
the lack of the elementary qualities of social efficiency in the races 
possessing them. The right of those races to remain in possession will 
be recognized ; but it will be no part of the future conditions of such 
recognition that they shall be allowed to prevent the utilization of 
the immense natural resources which they have in charge. 

The one underlying principle of success in any future relationship 
to the tropics is to keep those who administer the government which 
represents our civilization in direct and intimate contact with the 
standards of that civilization at its best ; and to keep the acts of the 
government itself within the closest range of that influence, often irk- 
some, sometimes even misleading, but always absolutely vital, the 
continual scrutiny of the public mind at home. 

These possessions present but in no acute form because of the 
paucity of population and its extreme backwardness character- 
istic relationships of white and non-white peoples : first, economic 
relations, the issue between the exploiters and the exploited ; and 
second, the problem of nationality, or the issue between the cul- 
tured races and races most of which can be said to have a culture 
only in the primitive sense. 5 

3 See Elizabeth Van Maanen-Helmer, The Mandates System in Relation to 
Africa and the Pacific Area, p. 16. 

4 The Control of the Tropics (1898), pp. 51, 57, 96. 

e Alfred E. Zimmern, The Third British Empire, p. 81. 


In 1493 Pope Alexander VI divided the undiscovered world be- 
tween the faithful states, Spain and Portugal; Portugal was to 
have all east of an imaginary line, drawn from the North to the 
South Pole, at the distance of a hundred leagues west of the 
Azores and Cape Verde Islands, and Spain, which began its ex- 
plorations westward across the Atlantic, was to have what lay to 
the west. Because of geographical ignorance and the inaccuracy 
of nautical instruments they fought for many years over the 
demarcation line in the Pacific, especially in reference to the 
Philippines and the rich spice islands east of Borneo, Spain ever 
retaining the Philippines, and Portugal the Moluccas and neigh- 
boring islands only to lose substantially all of them to the Dutch 
in the wars from 1600 to 1661. 

The British in the Pacific. 

For two hundred years following there was no active rivalry in 
the Pacific, the only industry was that of the whalers, and the 
only other "white" visitors were the missionaries whose organ- 
ized efforts began from London in 1796 traders, individual 
planters, and beach combers. Unfortunately many traders, be- 
yond the control of their governments, took advantage of the na- 
tives ; the planters also seized the lands of natives or impressed 
them into forced labor on the plantations. British feeling that 
some control was desirable became, in the nineteenth century as 
the result of French scientific exploration and government ex- 
pansion, the conviction that the control should be that of the 
British Government j with greater and better-organized naval and 
financial resources the British occupied or annexed a large part 
of the available territories. Although Australia was discovered, 
mapped, and tentatively settled by the Dutch, 6 the British Gov- 
ernment established a penal colony there in 1788 and in the nine- 
teenth century asserted a claim to the whole area in order to fore- 
stall French occupation; it took the same action in 1840 as to 
New Zealand. The British settlers were in fact more aggressive 
than the Government, the Dominions more eager for British em- 
pire in the Pacific than Great Britain itself the Australians to 

e Problems of the Pacific (1927), p. 229. 


annex the part of New Guinea not held by the Dutch, as they did 
in 1883, and to have Great Britain take the sovereignty over the 
Fiji Islands, and the New Zealanders to annex Samoa and Tonga 
and to federate with other islands. The British Government was 
embarrassed by such importunities; in Europe it had more im- 
portant problems the handling of which might be disturbed 
by aggressiveness in the Pacific difficulties with France over 
Egypt, for example, and anxieties over British relations with Ger- 
many, colonizing required military support, brought no revenue, 
and increased the tax burdens of England ; the policing of Tonga 
and the Fiji Islands, the suppression of the piracy of the British 
colpnists of Queensland and Fiji who ravaged the neighboring is- 
lands for plantation laborers, would lay an uncompensated weight 
on the shoulders of the British taxpayer already irked by the ex- 
pense of long and costly wars against the natives of New Zealand 
and South Africa. From the time of the establishment of the penal 
colony of New South Wales in 1788 "each step towards ordered 
settlement of British people in the Pacific, each later step towards 
free development and self-government, was stoutly opposed by the 
official classes. 5 ' 7 Froude even thought it unreasonable to require 
England to challenge a great European Power "in the interest of 
countries which might leave her on the morrow. 5 ' Four motives 
impelled action : first, a steady, continuous force, the characteris- 
tic British tendency to bring order out of chaos and to improve 
government; second, jealousy of French progress this remained 
in suspense for a considerable period while France was recovering 
from its disastrous war of 1870; third, the slowly growing con- 
sciousness of German rivalry and eagerness for a place in the 
southern sun ; fourth, and most compelling from the middle of the 
nineteenth century, was the demand of the British colonists of 
Australia and New Zealand for an extension of British dominion, 
whether of the home government or their own, by federation of 
British colonies and by annexation of the areas of large and small 
unoccupied south Pacific islands. This demand, beginning in the 
forties at the time of the creation of a French protectorate over 
Tahiti, became more pressing because of the activities of the Ger- 

7 Guy Scholefield, The Pacific, Its Past and Future, p. 274. 


man trading house of Godeffroy and Sons and Germany's sud- 
den change to an imperial colonizing policy; there ensued "the 
scramble of 1884," and the full adoption by the British Govern- 
ment of the colonial point of view. 

New Guinea lies off the north coast of Australia, at the near- 
est point only one hundred miles distant. The second largest is- 
land in the world, it is divided into three political sections : Dutch 
New Guinea has an area of 160,692 square miles with a popula- 
tion estimated at 195,460, the Australian Territory of Papua in- 
cludes 90,540 square miles with a population of about 87,786 
people, and the Australian Mandated Territory of New Guinea 
contains 68,500 square miles with a population of about 237,179. 8 
Scarcity of native laborers and the unwillingness of those who are 
at hand to work impede the economic progress of the island, 
parts of which are unexplored. It is known that gold exists in the 
Markham Valley of the mandated territory but the richness of 
the deposits has not been determined, coal has been discovered but 
very little mined, exploration for oil has been undertaken during 
the last ten years by the Australian and British governments, 
though the extent of the petroleum there is yet unknown. Of the 
several small harbors only one, Adolfhafen, would probably be 
adequate for large vessels. 

The Dutch territory is undeveloped except for a part of the 
western and northern coasts ; commerce and industry are practi- 
cally unknown. In 1926 Papuan imports were valued at 470,774, 
and exports at 685,896, consisting chiefly of copper, rubber, and 
copra. The mandatory report for 1926-27 states that the man- 
dated territory of New Guinea, which includes New Guinea main- 
land and the Bismarck Archipelago, exported goods valued at 
1,079,855 and imported goods valued at 660,753. 

Discovered by the Portuguese, the island was proclaimed suc- 
cessively a Spanish and British possession, but was first effectively 
occupied by the Dutch in 1828. They abandoned it in 1835 but 
later took over the western part from its western tip to approxi- 
mately the 141st eastern meridian. In 1867 a company from Syd- 
ney attempted to raise funds for colonization of southern New 

s Statesman's Y ear-Book, 1929. 


Guinea, but received neither funds nor sanction from the British 
Government, which was unwilling to undertake any activity in the 
Pacific which might entail military expenditure. The discovery 
of gold fields in New Guinea in 1878 intensified the Australians' 
desires, already aggravated by the fear of a German occupation. 

Bismarck was an opponent of German colonization ; he had the 
consolidation of the German people and the German position in 
Europe to attend to and wanted no additional complications. But 
the activities of German traders, notably of Godeffroy and Sons, 
and the ensuing controversies over claims and trade, compelled 
him to yield to the demand that imperial Germany protect its 
people wherever they might go, and he was forced into a co- 
lonial policy which he had previously denounced. He managed to 
convey to Granville, Secretary of State for the Colonies, the im- 
pression that Germany had no ambitions that need make England 
or the south Pacific British uncomfortable and that the northern 
side of New Guinea might be a legitimate field for German colo- 
nizing enterprise. England, suffering from many European em- 
barrassments, gave way to German claims in Fiji and, having 
"no desire to oppose the extension of German colonization in the 
islands of the South Seas which were unoccupied by any civilized 
power," agreed that British authority would embrace only that 
part of New Guinea "which especially interests the Australian 
colonies, without prejudice to any territorial questions beyond 
those limits." 9 Granville seems not fully to have advised his Prime 
Minister, as to German ambitions, and he certainly did not consult 
the Australians who were fearful of the German approach and 
wanted all non-Dutch New Guinea protected against annexation. 
The agreement made gave Germany about 92,000 square miles, of 
which 70,000 square miles were in northeast New Guinea, which 
became Kaiser Wilhelmsland, arid the rest in islands which were 
called the Bismarck Archipelago. Great Britain secured 90,000 
square miles in Papua or southeast New Guinea, about one-third 
of the island. 

The Australians were resentful when they heard of the accom- 

9 New Guinea and the Western Pacific, p. 4. British Parliamentary Papers, C. 
4273 (1885). 


plished settlement and protested vigorously. Convinced by the ac- 
tions of Germany in Tonga, Samoa, and Fiji that its protesta- 
tions of disinterestedness were not to be taken seriously, in 1883 
they passed what was called a British Monroe Doctrine for the 
adjacent territories. Unable to recover freedom of action vis-a-vis 
Germany, Great Britain nevertheless, under the colonial pressure, 
altered its policy, occupied the unappropriated districts of New 
Guinea, instructed its High Commissioner in 1886 that the sanc- 
tioning of the purchase of lands in the western Pacific had been 
decided upon, and by the Papua Act of 1905 placed the responsi- 
bility for the government on the Dominion of Australia. In 1895 
the boundary between Dutch and British New Guinea was ad- 
justed at The Hague. 

The Solomon Islands, which lie to the east of New Guinea and 
contain about 14,800 square miles, are the least developed of the 
British Pacific possessions. The population, consisting of warlike 
Melanesian tribes, is the largest of the British Pacific islands. 
Discovered in 1567 by the Spanish, these islands were visited by 
French missionaries in the 184<0's, and after the division with 
Germany the South Solomons were brought under British pro- 
tectorate between 1893 and 1900, the volcanic islands of Santa 
Cruz being included in 1898. An exact division between North 
and South Solomons was made at the time of the 1899 Samoan 
settlement with Germany. The British islands, the South Solo- 
mons, are administered by a resident commissioner, and the ex- 
German islands, the North Solomons, are held by Australia under 
a mandate. The exports of the South Solomons for 1926-27, con- 
sisting chiefly of copra, were valued at 451,994<. 10 

The Fijis, most valuable of the smaller British archipelagoes, 
contain over 7,000 square miles in 250 islands. Furnishing all 
kinds of tropical products, of which the most important are 
sugar, copra, fruit, and rice, their exports in 1927 amounted to 
1,997,374 ; n their imports, amounting to 1,223,303, came 
mainly from Australia, and secondarily from the United King- 
dom. With the island of Rotuma to the north, which was annexed 

10 Colonial Report for British Solomon Islands, 1927, p. 6. 

11 Colonial Report for the Fiji Islands, 1927, p. 20. 


to the Fijis in 1881, the population includes 90,236 native 
Fijians and 69,463 Indians. In the Fijis Melanesian and Poly- 
nesian meet ; the people are quick to learn English, improvements 
in agriculture, and the ways of white men. 

Tasman, the Dutch navigator, discovered the Fiji Islands in 
1643. Wesleyan missionaries went to them from Tonga in 1835. 
Cakobau, their King, offered to cede the islands to Great Britain 
in 1859, if Great Britain would pay some American claims ; the 
chiefs ratified the offer but Great Britain declined it. Through 
the influence of Europeans who went there to grow cotton when 
cotton prices rose as a result of the American Civil War, a con- 
stitution was set up under King Cakobau with a parliamentary 
administration ; but this was of short duration. As the natives still 
pressed for British protection, and Great Britain desired to stop 
the abuses of Polynesian labor traffic as well as to acquire a port 
of call between Panama and Australia, it accepted cession of the 
islands by the chiefs in 1874 and created them a separate crown 
colony. In 1914 a constitution was granted under which there is 
now a partly elective legislative council with a ministry of elected 

The tiny islands of the Phoenix group, ten of them northeast 
of the Fiji Islands, have nothing of interest to commerce except 
guano. Great Britain annexed the whole equatorial group between 
1889 and 1892. Eight of the islands were leased in 1914 to the 
Samoa Shipping and Trading Company for eighty-seven years. 12 
Howland and Baker belong in the class of doubtful sovereignty. 

The Tonga or Friendly Islands are almost due south of Samoa 
and just east of the 180th meridian. They comprise about 400 
square miles of land ; copra is their only considerable export. The 
inhabitants are Polynesians of a comparatively high level of 
civilization. Tasman discovered these also in 1643, and the Eng- 
lishman, Wallis, was there in 1767. Wesleyan missionaries came 
there from London in 1826, and Catholic priests were admitted in 
1843. The spreading of the new religion led to a series of wars by 
the pagans from 1837 until 1854 to oust the Christians ; then a 
native, a Christian convert, forced his way to the top, made him- 

12 The Dominions and Colonial Office List (1928), p. 484. 


self king under the title of King George Tubou I, and granted a 
constitution. Germany in 1879 secured a treaty which assured a 
coaling station, England followed suit by a treaty in the same 
year with a most-favored-nation clause, and the United States 
made a similar treaty in 1886. In the same year Tonga was made 
a neutral region by the Decree of Berlin, but in 1899, at the time 
of the settlement of the Samoan affair, Germany renounced its 
treaty rights of 1879, and in 1900 the British established a pro- 
tectorate. Since 1905 the finances have been administered by a 
British agent and consul, and a number of New Zealanders have 
served in different departments, especially since 1914. The Co- 
lonial Report of 19*27 gives the imports as 157,783 and the ex- 
ports as 235,391. 

The Gilbert and Ellice colony are a scattered group of coral 
atolls consisting of about 16 of the Gilberts and 9 of the Ellices, 
together with Ocean, Fanning, Washington, and Christmas Is- 
lands. They lie north of Fiji and northwest of Samoa, comprising 
about 180 square miles and having a population of about 30,000. 
Ocean Island is the only one which rises as much as 15 feet above 
sea level. It has phosphates, and the group exports copra. In 
1926-27 imports amounted to 103,453 and exports to 395,- 
728. 18 The Ellice islanders are an offshoot of the tawny Samoan 
stock. The original Gilbertese, a small, dark folk, were overcome 
by Samoans about the third century A.D., and the Gilbertese are 
now therefore a mixture. Hiram Bingham went out there from 
Boston as a missionary in 1856 and the natives are now nominally 
all Christians. 

The British discovered these islands near the close of the 
eighteenth century, asserted a protectorate over them in 1892, 
and at the expressed desire of the natives annexed them in 1915. 
There is a resident commissioner for the colony who is responsible 
to the High Commissioner for the Western Pacific. 

The adjacent atoll of Nauru, approximately twelve miles in 
circumference, contains rich phosphate deposits. Its exports in 
1928 were 362,112, mostly phosphates, and its imports 240,- 

13 Colonial Report for Gilbert and Ellice Islands, 1926-27, p. 8. 


229. 14 The population of Nauru in 1928 consisted of about 1,000 
Chinese, 130 whites, and some 1,300 Naurans and Caroline is- 
landers. The island was annexed by Germany in 1888 ; captured 
by the Australian Navy in 1914, it came under a mandate con- 
ferred upon His Britannic Majesty. By an agreement between 
Great Britain, Australia, and New Zealand in 1919 the first ad- 
ministrator was to be appointed for a term of five years by the 
Australian Government, and thereafter as the three governments 
should decide. In 1927, with the consent of Great Britain and 
New Zealand, a second administrator was appointed by the Aus- 
tralian Government for a period of five years. 15 The Australian 
and New Zealand governments also share with Great Britain in 
the administration and in the operation of the phosphate deposits, 
having bought out the concessionaire, the Pacific Phosphate Com- 
pany, in 1920. The government monopoly of the output of phos- 
phate has been criticized by the Permanent Mandates Commis- 
sion of the League. 

Pit cairn Island. 

Last of all the British possessions to mention is Pitcairn Is- 
land, an island of two square miles hanging at the tip of the 
Polynesian pendant that slopes away into the emptiness of the 
southeast Pacific. This uninhabited, fertile, volcanic isle was 
chosen by the mutinous crew of H.M.S. Bounty in 1790 as the 
Eden in which to live out their days on earth on a diet of coco- 
nuts and breadfruit and under such a sun as England never 
knew. The lure of a laborless life, their captain conjectured, 
"joined to some female connections, have most probably been the 
principal cause of the whole transaction." "The women at Ota- 
heite," he testifies, "are handsome, mild, and cheerful in their 
manners and conversation, possessed of great sensibility, and have 
sufficient delicacy to make them admired and beloved." 

One old mutineer lived on until 1829, and three English joined 
the community after 1830. The half-breed islanders were virtu- 

i* Report to the Council of the League of Nations on the Administration of 
Nauru during 1928, p. 43. 
ic Ibid., pp. 3, 57. 


cms, orderly, and devout, and lived an idyllic island life. 16 By 1856 
the inhabitants had become so numerous that some moved to Nor- 
folk Island, from which two families returned to Pitcairn. In 
1926, 853 persons dwelt on Norfolk Island. In 1898 administra- 
tion of Pitcairn Island as a British colony was placed under the 
control of the High Commissioner for the Western Pacific. 

The French in the Pacific. 

The French explorers of the Pacific in the late eighteenth cen- 
tury were unfortunate; of their four early navigators, de Bou- 
gainville was the only one to return. In planting colonies they 
sought naval bases and sites for penal settlements, and were anx- 
ious to advance Catholic missions ; they were less interested in pro- 
moting trade. Their holdings comprise over 8,500 square miles ; 
their native wards are Polynesians who are rapidly dying off. 

In the Society Island Archipelago and its dependent groups 
lying between the 10th and 20th south parallels and between the 
145th and 155th west meridians and in the high volcanic Mar- 
quesas a little to the north they have the nearest good harbor to 
the Panama Canal. The most important products for export are 
copra and vanilla. Some of these islands, of which the principal 
is Tahiti, were named by Captain Cook in 1769, and in 1825 the 
queen regent asked for a British protectorate, an offer which 
Canning declined because of the remoteness of the island. 

The island life, before its contacts with the civilization of the 
machine age, was described in the limpid prose of the eighteenth 
century : 

Two or three bread-fruit trees, which grow almost without any cul- 
ture, and which flourish as long as he himself [the islander] can ex- 
is The story of the mutiny and the subsequent history of the mutineers and of 
the colony are told by Sir John Barrow, A Description of Pitcairn' s Island and 
its Inhabitants with an authentic account of the Mutiny of the Ship Bounty and 
of the Subsequent Fortunes of the Mutineers (New York, 1878). 
The muse was stirred by their fate: 

"Young hearts which languished for some sunny isle, 
Where summer years, and summer women smile, 
Men without country, who, too long estranged, 
Had found no native home, or found it changed, 
And, half uncivilized, preferred the cave 
Of some soft savage to the uncertain wave." 


pect to live, supply him with abundant food during three-fourths of 
the year. The cloth-trees and eddo-roots are cultivated with much less 
trouble than our cabbages and kitchen -herbs. The banana, the royal 
palm, the golden apple, all thrive with such luxuriance, and require 
so little trouble, that I may venture to call them spontaneous. Most 
of their days are therefore spent in a round of various enjoyments, 
where Nature has lavished many a pleasing landscape; where the 
temperature of the air is warm, but continually refreshed by a whole- 
some breeze from the sea; and where the sky is almost constantly 
serene. A kind of happy uniformity runs through the whole life of the 
Taheitans. They rise with the sun, and hasten to rivers and fountains 
to perform an ablution equally reviving and cleanly. They pass the 
morning at work, or walk about till the heat of the day increases, 
when they retreat to their dwellings, or repose under some tufted 
tree. There they amuse themselves with smoothing their hair, and 
anoint it with fragrant oils ; or they blow the flute, and sing to it, or 
listen to the songs of the birds. At the hour of noon, or a little later, 
they go to dinner. After their meals they resume their domestic 
amusements, during which the flame of mutual affection spreads in 
every heart, and unites the rising generation with new and tender 
ties. The lively jest without any ill-nature, the artless tale, the joc- 
und dance, and frugal supper bring on the evening, and another visit 
to the river concludes the actions of the day. Thus contented with 
their simple way of life, and placed in a delightful country, they are 
free from cares and happy in their ignorance. 

Beginning in 1836, when the Tahitians refused to admit 
French priests, the government of Louis Philippe showed an in- 
terest in the island in order to gain popularity at home, demanded 
toleration for Catholicism, and presented an ultimatum for an 
apology, an indemnity, and a salute. France deprived the Tahi- 
tians of independence in successive stages: it obtained a protec- 
torate in 1842; by the 1847 Declaration of London, the French 
and British agreed to the independence of the northwest part of 
the group known as the Leeward Islands ; between 1880 and 1888, 
France finally obtained the agreement of the Tahitian ruler and 
of Great Britain to French sovereignty over the group, and a re- 
nunciation by Germany of all claims. The Marquesas Archi- 
pelago, northeast of Tahiti, which contains 480 square miles and 


has a population of about 2,255, is a dependency of the Society 
Islands, as is also the Tuamotu Archipelago with an area of over 
300 square miles and a population numbering 4,276. 

New Caledonia, the largest of the French possessions, lies about 
1,000 miles east of Australia and, with the Loyalty and Wallis and 
other small groups as dependencies, contains 7,235 square miles. 
The natives are of mixed Melanesian and Polynesian blood. The 
island was a convict colony until 1898; in 1916 only 2,680 out of 
a population of 50,000 were of convict origin. New Caledonia is 
one of the leading sources of the world's supply of nickel and of 
chromium; copra, cotton, coffee, phosphates, and guano also are 
exported. After French missionaries had been ten years in these 
islands Louis Napoleon annexed New Caledonia with the Loyalty 
Islands in 1853, to which was added Wallis Archipelago in 
188788. A good many Japanese have gone there as laborers and 
both New Zealand and Australia profess to be worried at the 

The New Hebrides, where the French have a condominium with 
the British, complete the roster of French interests in the islands. 
Lying to the eastward of New Caledonia, the group consists of 
about eighty islands, many of them volcanic, and comprises 
about 6,000 square miles of the most fertile land in the Pacific. 
The natives are Melanesians with some mixture of Polynesian. 
For many years these islands were practically a "no man's land," 
a hunting ground for recruiting vessels. In 1878 France and 
England agreed to a neutrality "understanding" which was re- 
affirmed in 1883. Germany, in 1885, renounced some shadowy 
claims in favor of France. In 1887 an Anglo-French Convention 
agreed to the future protection of the New Hebrides under a 
joint commission of British and French naval officers. A new Lon- 
don Convention, in 1906, provided for a "region of joint influ- 
ence" ; British and French nationals were to have equal rights and 
each Power was to have jurisdiction over its own citizens, citizens 
of other Powers to be under either British or French jurisdiction. 
Each of the two Powers was to appoint a resident commissioner 
who should have executive jurisdiction in these islands, and a 
composite court was to contain one British judge, one French, and 


a third of neither nationality to be appointed by the King of 
Spain; there should be neither fortifications nor penal settle- 
ments. This convention was submitted to and grudgingly ap- 
proved by Australia and New Zealand before it was ratified by 
Great Britain. It has been superseded by a convention of 1914, 
ratified in 1922. The island trade in 1927 amounted to 398,028 
in exports and 307,939 in imports, nearly all from France. 17 

Former Spanish and German Colonies. 

Spain in the Pacific is but the shadow of a vanished empire. It 
once possessed the Philippines, the Mariana or Ladrone Islands to 
the northeast, the Caroline Archipelago south of the Marianas, 
and the Marshall Islands east of the Marianas, all discovered by 
the great Spanish explorers of the sixteenth century and pene- 
trated at various times by Spanish missionaries. The Pelew and 
Caroline Islands Spain also had by award of Leo XIII in an arbi- 
tration with Germany in 1885. All are lost the Philippines by 
treaty to the United States in 1898, all the other groups by sale 
to Germany in 1899 for 25,000,000 pesetas ($4-5,000,000) after 
the United States had destroyed Spanish naval power. 

Germany, too, has disappeared. It came late into the Pacific 
and went soon. 18 The great Hamburg trading house of J. Caesar 
Godeffroy and Sons established a branch in Samoa in 1857 19 and 
soon had posts or agencies in the Fiji, Gilbert, Ellice, Tonga, 
Marshall, and Solomon Islands and in New Britain and the New 
Hebrides. This trade expansion created a desire in 1871 for a 
coaling station in Samoa. In the same year the suggestion that 
some of the Pacific colonies of defeated France be taken over was 
received with indifference by the German public and with hos- 
tility by the Government. The Godeffroy house became bankrupt 
in 1879 over Russian paper and Westphalian iron, but when 
Bismarck was forced into a "strong" colonial policy in 188485 
Germany made itself mistress of a large section of New Guinea, 

i? Colonial Report for the New Hebrides, 1928. 

is German interests in Samoa are discussed in the section of this chapter de- 
voted to the United States interests in the Pacific, pp. 305-509. 

IB Date given in 1918 by the Interstate Commission of Australia. The German 
historian, Zimmermann, fixes it at 1865. 


of the Bismarck Archipelago, and of the Marshall Islands. Press- 
ing also into the Carolines, it tactfully withdrew through the form 
of a Papal arbitration which went in favor of Spain, Bismarck 
valuing the friendship of Spain more than the islands. All its 
holdings, including the Pelew, Caroline, Mariana, and Marshall 
Islands purchased from Spain in 1899, the North Solomons, 
added by agreement with Great Britain in 1899, and Western 
Samoa, obtained in the same year, were taken by the British, 
Australian, and Japanese navies and New Zealand expeditionary 
forces in 1914. The former German possessions south of the equa- 
tor are, with the exception of Nauru, under mandate to Australia 
or New Zealand, and the island groups north of the equator to 

Japanese Interests. 

In the Caroline group, which in a general sense includes the 
Pelews, there are approximately 500 islands and islets ; compris- 
ing about 550 square miles, they stretch out over 2,000 miles of 
the sea floor. The most important is the island of Yap, a cable 
station. 20 The natives, Micronesians with a mixture of Polynesian, 
Melanesian, and Malay, are diminishing under diseases con- 
tracted from the whites. They have been "Christianized" and 
"civilized," mainly by the American Board for Foreign Missions. 

There are fifteen islands in the Mariana or Ladrone group, of 
which Guam, the largest, belongs to the United States. The peo- 
ple of the island are Chamorros a delicate race like the Filipinos 
stocky Caroline Islanders, Tagalogs from the Philippines, and 
a few Chinese. Japan has for a long time completely dominated 
the trade and carried it in Japanese ships. 

In the Marshalls are thirty atoll islands ; little is known about 
them, for one reason because they lie in the path of the most dev- 
astating typhoons. The inhabitants, of Micronesian stock, have 
a complicated native government, divided among chiefs, nobles, 
and commoners. In the case of all three groups Caroline, Mari- 
ana, and Marshall Islands a large part of the chief exports, 
copra and sugar, goes to Japan. 

20 See also pp. 311-312. 


Islands of Uncertain Status. 

The status of some Pacific islands, none of which has any com- 
mercial value although some may eventually be useful as resting 
places for airplane flights in some advanced stage of aeronautic 
development, is uncertain partly because of an act of Congress, 
approved August 18, 1856: 

Section 5570. Whenever any citizen of the United States discovers 
a deposit of guano on any island, rock, or key, not within the lawful 
jurisdiction of any other government, and not occupied by the citi- 
zens of any other government, and takes peaceable possession thereof, 
and occupies the same, such island, rock, or key may, at the discre- 
tion of the President, be considered as appertaining to the United 

Section 5578. Nothing in this Title contained shall be construed as 
obliging the United States to retain possession of the islands, rocks, 
or keys, after the guano shall have been removed from the same. 

Prior to 1880, bonds were filed, in accordance with the provi- 
sions of the Act, for about seventy islands ; but it is probable that 
several names and positions have, in some cases, been given for a 
single island. 21 The doubt as to sovereignty arises in part 22 also 

21 A list of guano islands as of December 22, 1885, may be found in John Bas- 
sett Moore's Digest of International Law, I, 567-580. 

22 In the administrative system of the United States no specific provision is 
made for authoritative definition of United States claims to territory. At the 
present time such claims may be asserted or waived by four or five different 
executive departments. Statements relating to territory, the sovereignty of which 
is in dispute, appear in publications of various departments; sometimes based 
upon available publications of the foreign government which has a conflicting 
claim, they disregard unpublished sources of information concerning United 
States claims; the same department may on another occasion enlist the help of 
the Department of State in making good the claim of the United States to the 
disputed island. 

The Hydrographic Office of the Navy publishes charts, but in times past these 
charts have been at variance with the claims made by the Department of State, 
notably in the Las Palmas Island affair. The Department of the Interior issued 
a publication called Boundaries, Areas, Geographic Centers and Altitudes of the 
United States, United States Geological Survey Bulletin No. 689, by Edward M. 
Douglas. This is now in process of revision and will show some corrections, but 
the older edition did not completely sustain the positions taken by the Depart- 
ment of State. 

Questions relating to the possessions of the United States as a whole, and to 
claims which are not admitted by other countries, as well as the definition of the 
territorial possessions of the United States, should lie, it would seem, exclusively 


from the failure of any nation subsequent to the Guano Act to 
establish a satisfactory basis for a claim to sovereignty on grounds 
required by international law. 28 

British Admiralty publications state that Baker and Howland 
Islands, lying along the equator, are under British protection and 
that they are leased to the Pacific Islands Company. The guano 
has been exploited by both Americans and British, and in view of 
all the facts the title to these islands, as between the United States 
and Great Britain, may be regarded as uncertain. Christmas Is- 
land has been brought within the Gilbert-Ellice colony by an 
Order in Council of November 28, 1919, but the United States 
Government appears to hold the view that it has never relin- 
quished such claims as it may have by virtue of the former occu- 
pancy of Christmas Island by American citizens. 

Jarvis Island was formally annexed by H.M.S. Cormorant on 
June 3, 1889, and is named as British in official British publica- 
tions, but a case might be made that the British have abandoned 
it. Washington Island, once bonded as a guano island, was for- 
mally annexed by Great Britain in 1889 and was included under 
the administration of the Gilbert-Ellice colony. 

American Interests in the Pacific. 

American whalers were in the Pacific before the American 
Revolution. By 1820 there were many American ships, whaling 
and trading in the Pacific, and as many as 2,000 American sea- 
men a year at Honolulu, the favorite outfitting and repair har- 
bor. During the first third of the nineteenth century American 

within the jurisdiction of the Department of State, which alone should determine 
policy. Subject to that control, it would seem that information relating to any 
administered possession of the United States, such as Alaska, Hawaii, Porto 
Rico, Samoa, the Philippine Islands, or the Canal Zone, should be furnished by 
the department which is charged with its administration. 

This anomaly is only one facet of the larger question of the consolidation of 
the administration of the various external or colonial possessions of the United 
States in a single department. (See Survey, 1929, pp. 312-313.) 

23 In the case of Orafflin v. Nevassa Phosphate Company of New York, 35 Fed. 
474, the court, in construing the Act of 1856 relating to Guano Islands, said: 

"... The provisions of the law entirely negative any ideas that such islands 
were in any sense to become part of the territorial domain of the United States. 
It is clear that the United States extends its protection to the discoverer and his 
assigns solely to enable him to obtain the guano.'* 


trading and whaling expeditions covered a considerable part of 
the Indian and Pacific oceans. Missionaries, too, began to work in 
the Pacific islands. Shipwrecks were numerous; mutinies of the 
motley crews were not uncommon; some of the traders acted on 
theories of equality and humanitarianism, but the treatment of 
natives by Americans and of Americans by natives left much to 
be desired. Altogether it became increasingly desirable that the 
United States Government should assume oversight, protective 
and restraining, of its nationals. This it was not unduly anxious 
to do ; while some persons advocated the desirability of dispatch- 
ing government expeditions to the Pacific for the purposes of dis- 
covery, exploration, and protection of American interests, opin- 
ion in the United States was either neutral or opposed. The 
conflicting points of view are made clear in the twelve years of 
debates in and outside Congress which preluded the Wilkes expe- 
dition. When the House received President Adams' recommenda- 
tion of a bill to provide for the expedition, its Committee on Naval 
Affairs counseled delay: 

So far as this plan embraces what may be properly regarded as a 
voyage of discovery, the Committee can perceive nothing in the pres- 
ent condition of this country to recommend it to the favor of Con- 
gress. With immense unsettled and unexplored regions at home, they 
should consider it altogether superfluous to attempt the discovery of 
unknown lands, however rich they may be in resources, however in- 
viting to the enterprize of individuals, or the ambition of rulers. . . . 
It appears to a portion of the Committee, therefore, that in the pres- 
ent condition of the United States, while the interior of our own 
country is yet unexplored while the charts of our maritime fron- 
tiers are imperfect while the islands, shoals, reefs, etc., along our 
own coasts have not been accurately surveyed and examined while 
the northwest coast, and especially the mouth of the Columbia river, 
remain almost unknown it is altogether premature on the part of 
the American government to enter upon the exploration of the Pa- 
cific Ocean and South Seas, or even to attempt to survey all the is- 
lands, etc., which may exist there. 24 

In 1836 Congress authorized the sending of the Wilkes expedi- 

24 Senate Documents, 20-22; 94, pp. 6-8; Committee Report, February 23, 1829. 


tion. Under the command of Charles Wilkes, and carrying a con- 
siderable group of scientists, a squadron of six vessels sailed from 
Hampton Roads in August, 1838. Three and a half years later 
Wilkes returned by way of the Cape of Good Hope, having cir- 
cumnavigated the globe and visited, explored, or charted many of 
the Pacific groups. 

With native chiefs in Samoa and the Fijis he negotiated agree- 
ments for the protection of foreign ships, consuls, and nationals. 
To Wake Island Wilkes asserted the title of the United States in 
1841, a claim not substantiated until 1899. From the time of this 
prologue to American interests in the Pacific, the participation of 
the United States in the affairs of that area has never ceased to be 

Missionaries from Boston and other centers of the activities of 
conscience went out and Christianized many of the islands, often 
possessing the power of rulers. The interest of the United States 
before 1898 was mainly confined to the Aleutians, Hawaii, and 
Samoa. The Fijians, after their rejection by Great Britain, 
sought annexation to the United States but were refused by it 
also ; the United States would not even accept Butaritari in the 
Gilberts on the King's petition. Secretary Frelinghuysen wrote 
in 1883 to the Hawaiian Minister: 

While we could not, therefore, view with complacency any move- 
ment tending to the extinction of the national life of the intimately 
connected commonwealths of the Northern Pacific, the attitude of 
this government toward the distant outlying groups of Polynesia is 
necessarily different. 25 

Admiral Mahan wrote of the earlier expansionists : 

Their vision reached not past Hawaii, which also, as touching the 
United States, they regarded from the point of view of defence 
rather than as a stepping stone to any farther influence in the world. 
So far as came under the observation of the writer the expansion- 
ists themselves, up to the war with Spain, were dominated by the 
purely defensive ideas inherited from the earlier days of our natural 
existence. The Antilles, Cuba, the Isthmus, and Hawaii were up to 

2&For. ReL, 1883, p. 575. 


the time simply outposts positions where it was increasingly evi- 
dent that influence might be established dangerous to the United 
States as she then was. Such influences must be forestalled ; if not by 
immediate action, at least by a definite policy. 26 

The Aleutians, which protect the coast of Alaska, were ac- 
quired with the purchase of that territory from Russia in 1867. 
In the same year the United States appropriated the uninhabited 
Midway Islands, two small coral islands 1,200 miles northwest of 
Honolulu, in connection with Seward's proposed Korean expedi- 
tion 27 and in "reafBrmation of the policy that the annexation of 
the Sandwich Islands was, under certain conditions, desirable." 28 


Hawaii was the first of American interests in the Pacific, 
though annexation did not come until 1898, and the policy 
toward Honolulu has always epitomized American policy in the 
Pacific and even in the Far East. The Hawaiian Islands are 2,091 
miles southwest from San Francisco. Johnston Island, some dis- 
tance from the main Hawaiian group, was bonded as a guano is- 
land in 1859. Great Britain formally annexed it in 1892, but 
later withdrew the claim 29 and the island is now acknowledged in 
official British publications to be an American possession and 
American publications list it as one of the Hawaiian dependencies 
which were acquired in 1898. British publications are not agreed 
as to the status of Palmyra, a cluster of small, low islets about 
1,100 miles south of Hawaii, which was bonded by the United 
States as a guano island in 1860. Although annexed by Great 
Britain in 1889, it was included by the United States as among 
the islands belonging to Hawaii in view of claims of annexation 
by the King of Hawaii in 1862. 

While expanding through Oregon and California to the Pa- 
cific, planning transcontinental railroads and seeking a canal 
route across Central America, Americans were considering with 
interest certain incidents occurring in the Hawaiian Islands. The 

2e The Problem of Asia (1900), p. 7. 27 See p. 29. 

28 Tyler Dennett, "Seward's Far Eastern Policy," American Historical Review, 
October, 1922. 

29 British Colonial Office List (1917), p. 438. 


first Americans to reach this archipelago arrived in 1789, five 
years after the appearance of the Empress of China at Canton. 
A generation later began the impact of American civilization 
upon the islands when, in 1820, fourteen missionaries arrived 
from Boston. In the following year an "Agent of the United 
States for commerce and seamen" was appointed to Honolulu; 
three years later a consul was established there. In 1826 Captain 
Thomas ap Catesby Jones negotiated the first treaty signed by 
the rulers of the archipelago; although this provided protection 
for Americans and their rights on the most-favored-nation basis, 
it failed of confirmation in the Senate. Treaties negotiated by the 
commanders of British and French warships in 1836 and 1839, 
respectively, were more fortunate in their outcome. 

In 1842 the Secretary of State, Daniel Webster, declared it to 
be "the sense of the Government of the United States, that the 
Government of the Sandwich Islands ought to be respected ; that 
no power ought either to take possession of the islands as a con- 
quest or for the purpose of colonization, and that no power 
ought to seek for any undue control over the existing Government 
or any exclusive privileges or preferences with it in matters of 
commerce." 30 In a special message to Congress of the same year 
President Tyler stated that although five-sixths of all ships 
touching the islands were American, the United States sought 
"no peculiar advantages, no exclusive control over the Hawaiian 
Government, but [was] content with its independent existence. 
..." He added that his Government would feel justified, "should 
events hereafter arise to require it, in making a decided remon- 
strance against the adoption of an opposite policy by any other 
power." 31 

An opportunity for such a "remonstrance" presented itself in 
the following year when, under pressure, the Hawaiian king sur- 
rendered his sovereignty to a British naval officer, 32 at the same 

30 Moore, op. cit., I, 475. 

si J. D. Richardson, A Compilation of the Messages and Papers of the Presi- 
dents, 1789-1908, IV, 211-214. 

32 In his pleasure at the gift of a schooner by George IV, Kamehameha II 
offered in 1822 to place the islands under British protection. They had been offered 
to the British once before in 1794. 


time appealing to Washington to use its influence on London. In 
correspondence with Everett Palmer, the United States minister, 
in London, the acting Secretary of State remarked that "we might 
even feel justified, consistently with our principles, in interfering 
by force to prevent its falling into the hands of one of the great 
powers of Europe." The British Government made no attempt to 
follow up the opportunity offered by the King's action. 

When, from the summer of 1849 to that of 1851, Rear Admiral 
Tromelin of the French Navy intervened for a time in Hawaii 
Secretary Webster reasserted the position taken by the United 
States in 1843 : 


The name of the United States minister in London listed as 
"Everett Palmer" in line 2 on page 297 should be "Edward 

Jb'ranee were most strained, JVing ivamenamena 111 maae prepa- 
rations for placing his kingdom under the protection of the United 
States, either temporarily or permanently as developments might 
determine. Secretary Webster was not agreeable to this solution 
and the plan fell through. Two years later Secretary of State 
Marcy believed, as also apparently did England and France, that 
Hawaii must eventually come under the control of one of the 
Powers, and he felt that his Government was the one to undertake 
the burden. Accordingly, in April, 1854, the Secretary indicated 
to the United States Commissioner in Hawaii, David Gregg, his 
desire that the latter should arrange for annexation. Despite the 
protests of English and French officials, the Hawaiian king and 
the American Commissioner negotiated a treaty of annexation. 
Secretary Marcy failed to submit the document to the Senate, 


considering the annuities to be paid to the Hawaiian rulers too 
high, and, more important, disapproving a provision in the treaty 
looking to the admission of the islands as a state in the American 

In May, 1873, an American army officer, Major General Scho- 
field, who was observing the defensive and commercial possibilities 
of the Hawaiian harbors, reported the apparent unreadiness of 
the islands for annexation but their willingness to give control 
of Pearl Harbor to the United States in exchange for a treaty of 
reciprocity. Americans were interested in the sugar industry, and 
in 1875 a treaty of reciprocity was signed; it contained a non- 
alienation clause and gave to the United States special rights not 
to be claimed by other nations under the most-favored-nation 
clause. Against these American privileges Great Britain pro- 
tested for several years ; when it attempted to negotiate a similar 
treaty with Hawaii, the United States successfully objected. As 
the growing weakness of the native Hawaiians and the great in- 
flux of Chinese immigration threatened to turn Hawaii toward 
Asia rather than toward the Occident, Secretary of State Blaine 
expressed the hope that the Hawaiian Government might encour- 
age immigration of American homesteaders as an offset to the 
Asiatics. "The Hawaiian Islands/' he declared in 1881, 

. . . cannot be joined to the Asiatic system. If they drift from their 
independent station it must be toward assimilation and identification 
with the American system to which they belong by the operation of 
natural laws and must belong by the operation of political neces- 
sity. 33 

Pearl Harbor, in which the United States Government had been 
interested since 1872, was leased in 1887 as a naval base when a 
second reciprocity treaty was ratified by the two governments. 

The Hawaiian government understood that the cession was tempo- 
rary, to endure only as long as the reciprocity treaty was main- 
tained. The United States, however, interpreted it as a permanent 

33 Dennett, op. cit., p. 611. 


and absolute cession, though for many years thereafter it neglected 
to improve and to utilize the harbor. 34 

Contemporaneously Washington refused to join England and 
France in guaranteeing Hawaiian neutrality. 85 

In 1891 the King of Hawaii, Kalakaua, died in San Francisco. 
He was succeeded by his sister, Liliuokalani, whose reactionary 
and mistaken policies resulted in a bloodless revolution, fomented 
largely by American citizens, in January, 1893. When the Queen 
was forced to abdicate, a group of Americans left for Washington 
to negotiate a treaty of annexation with the Harrison administra- 
tion. Charging that 

the monarchy had become effete and the queen's government so weak 
and inadequate as to be the prey of designing and unscrupulous per- 

President Harrison, in commending the treaty to the Senate, 
frankly remarked : 

Only two courses are now open ; one, the establishment of a pro- 
tectorate by the United States, and the other, annexation full and 
complete. I think the latter course, which has been adopted in the 
treaty, will be highly promotive of the best interests of the Hawaiian 
people, and is the only one that will adequately secure the interests 
of the United States. These interests are not wholly selfish. It is es- 
sential that none of the other great powers shall secure these islands. 
Such a possession would not consist with our safety and with the 
peace of the world. 88 

The consular and diplomatic officials of all the governments 
represented in Hawaii, with the important exceptions of France 
and England, had recognized the Provisional Government which 
was headed by the American, Sanford B. Dole. The British Minis- 
ter and his co-nationals, and the officers of the warship Garnet, 
openly sided with the Queen and her party, who attempted also to 
obtain the support of the numerous Japanese in the islands. In 

34 W. F. Johnson, America's Foreign Relations, II, 163. 

35 Tyler Dennett comments : "Candor must compel one to admit that the Ameri- 
can policy in the Hawaiian Islands was showing marked parallels to the existing 
and later policies of China and Japan in Korea." Loc. cit. 

30 Journal of the Executive Proceedings of the Senate, XXVIII, 397. 


the face of these difficulties, and realizing that the dignity of the 
Senate and the political situation in the United States incidental 
to the approaching change of administration would forbid hasty 
action in the confirmation of an annexation treaty, the Provi- 
sional Government induced the United States Minister, John L. 
Stevens, to proclaim a protectorate over the islands subject to 
confirmation by Washington, and to raise the American flag over 
Hawaiian government buildings. This action Washington dis- 

Annexation became a partisan issue in politics; President 
Cleveland withdrew the treaty from the Senate and sent a special 
commissioner to investigate the actions of the United States 
Minister and his co-nationals with reference to the revolution. As 
the report submitted was adverse to the Provisional Government, 
President Cleveland in his message to Congress in December, 
1893, stated his belief that "the United States could not, under 
the circumstances disclosed, annex the islands without justly 
incurring the imputation of acquiring them by unjustifiable 
methods," 37 and accordingly declined to return the treaty of 
annexation to the Senate. He and his Secretary of State, Walter 
Q. Gresham, then did what they could, without calling upon Con- 
gress, to bring to an end the existence of the Provisional Govern- 
ment. Despite the difficulties with which it was faced, the latter, 
supported by the people generally, took steps toward making 
itself permanent. In January, 1895, the Queen's attempt to over- 
throw the republic failed, and she renounced her claim. 

In the presidential campaign of 1896 Hawaiian annexation 
was an issue. Shortly after his inauguration President McKinley 
submitted to the Senate a second annexation treaty. There the 
question was kept in the field of party politics ; as only a majority 
were in favor, it hung fire until after the outbreak of the Spanish- 
American War. By opening their ports to American ships, the 
Hawaiians to all intents and purposes became the allies of the 
United States. The necessary two-thirds Senate majority still be- 
ing unobtainable, recourse was had to annexation by joint Con- 
gressional resolution. Owing to a Senate filibuster two months 

87 Johnson, op. cit., II, 174. 


went by before the resolution had passed both houses. May 4 to 
July 6, 1898. In April, 1900, Congress authorized the creation 
of the Territory of Hawaii. 

While the annexation treaty was in the Senate protests against 
the absorption of the islands were received from Great Britain 
and Japan, the former on the ground, not seriously pressed, that 
its carrying trade between the islands and continental United 
States would cease; in fact by far the greater part of the trade 
was already carried in American ships and an insignificant part 
only in British. 

The Japanese protest was based on the twofold problem of 
immigration and maintenance of the status quo in the Pacific. 
During the last decade of the nineteenth century Japanese immi- 
gration became somewhat disturbing to the United States Gov- 
ernment. In the American- Japanese Treaty of 1894 was incor- 
porated a blanket proviso to safeguard the United States against 
labor immigration from Japan. To this Japan gave unwilling 
assent. Of the approximately 90,000 inhabitants of the Ha- 
waiian Islands in 1890, 7% P er cen ^ were Japanese; eight 
years later their numbers had doubled. For these Japan de- 
manded of the new republic of Hawaii in 1893 rights equal to 
those of the natives, and four years later required continued free 
immigration. On several occasions Japanese war vessels appeared 
at Honolulu. Should unrestricted Japanese immigration continue, 
and should the immigrants be granted citizenship privileges, gov- 
ernmental authority might easily fall to them, and the United 
States might lose control of Pearl Harbor. The Japanese factor 
was not without influence in bringing about annexation in 1898. 
On the Japanese side, the desire for continued American friend- 
ship and general diplomatic support, more particularly with ref- 
erence to Korea, led Japan not to maintain an irreconcilable at- 
titude. Its claims on the Hawaiian Government on behalf of its 
subjects in the islands were settled and the immigration issue re- 
mained dormant for a period. Application to the Hawaiian, and 
later the Philippine Islands, of the immigration laws enforced 
in the United States proper brought renewed protests from 


Hawaiian Products. 

Sugar is the largest Hawaiian product. The output for the 
years 1923-28 was as follows: 38 


Crop Year ending September 30, 1923 54.5,606 

Crop Year ending September 30, 1924 701,433 

Crop Year ending September 30, 1925 776,072 

Crop Year ending September 30, 1926 787,246 

Crop Year ending September 30, 1927 811,333 

Crop Year ending September 30, 1928 897,396 

The acreage in this time increased only from 115,000 to 130,968 
and the tonnage gain was mainly due to phenomenally favorable 
weather conditions. Of pineapples, the second largest product, the 
pack exported during 1928 amounted to $40,871,581 ; the coffee 
export was valued at $1,368,826. 39 The plantation laborers are 
largely Filipinos, with Japanese in second place, and a small 
number of Portuguese, Americans, Chinese, Porto Ricans, and 
Koreans. There is a constant movement of laborers between the 
Philippines and Hawaii. 

The trade in 1928 was as follows: 40 

Countries Imports Exports 

Australia $ 312,821 $ 21,811 

British Oceania 333 7,259 

British India 1,525,097 1,991 

Canada 30,132 511,939 

Chile 1,924,045 

France 18,978 811 

Germany 672,377 95,392 

Hong-kong 553,485 122,509 

Japan 3,278,782 186,246 

New Zealand 643,282 35,946 

Philippines 527,695 690,225 

United Kingdom 145,272 559,276 

Other 728,911 290,340 

Total Foreign $10,361,210 $ 2,523,745 

United States $77,823,643 $116,956,090 

Grand total $88,184,853 $119,479,835 

The pure-blooded Hawaiians, rapidly disappearing, 41 are 

ss Annual Report of the Governor of Hawaii, June, 1929, p. 3. 

wibid., p. 6. 40 Und. f p. 41. 

4 * The Hawaiians intermarry freely with Chinese, Japanese, and Filipinos, and 
the various crosses seem to exhibit a resistance to the diseases brought by western 
races which pure-blooded Hawaiians have never shown. 



brown Polynesians, with attractive features and black hair ; erect 
and vigorous, they are good sailors and skilled in animal and 
plant lore. The racial composition of Hawaii is shown in the fol- 
lowing table :* 2 


Racial Ancestry 




American ^ 


German | 




Russian J 




A siatic-Hawaiian 










Porto Rican 
















.... 44 







All others 








Racial Ancestry 
Porto Rican 
All others 



































42 Annual Report of the Governor of Hawaii, June, 1929, p. 46. 

43 1920, Bureau of Census compilation; Board of Health first compiled citizen- 
ship figures in 1924. 

44 Owe allegiance to the United States. 



Racial Ancestry 
Caucasian- Hawaii an 
Porto Rican 
All others 














Guam, Wake, and Samoa. 

Guam, one of the Marianas, after its capture in the Spanish- 
American War by the Charleston, was taken over by the United 
States from Spain along with the Philippines, 45 because of its ex- 
cellent harbor and its importance as a cable station which con- 
nects with Honolulu, Tokyo, and Manila and as a naval station 
en route from Honolulu, 3,843 miles, to Manila which is 1,500 
miles beyond. It has a population of 16,000 persons of Indonesian 
stock, whom 24 American and 132 native teachers are trying to 
educate in English. In the year ending November 15, 1928, the 
United States Government appropriated $12,000 for education 
in Guam and $18,000 for the care of the sick and the maintenance 
of lepers. For the year ending June, 1929, the imports were $673,- 
758 and the exports $247,666. 46 

The Wake Islands, uninhabited islands about 2,000 miles west 

45 That the United States was interested in other islands in this region is indi- 
cated by the following communication : Hay to Frye at the Paris Peace Conference 
of 1898: "You are therefore instructed to insist upon the cession of the whole of 
the Philippines, and if necessary, pay to Spain $10,000,000 to $20,000,000, and if 
you can get cession of a naval and telegraph station in the Carolines, you can offer 

46 Report of the Governor of Gvam, 1929, p. 18. 


of Hawaii, were taken by the Navy Department on January 17, 
1899, and are United States possessions. 

Swain's Island, occupied since 1856 by an American family en- 
gaged in raising coconuts, has been recognized by Great Britain 
as an American possession ; the assumption of sovereignty over it 
by a joint resolution of Congress approved March 4, 1925, 47 made 
the island a part of American Samoa and placed it under the 
same administration. 

There are fourteen islands in the Samoan group with a total 
area of about 1,700 square miles ; only three have an area of over 
200 square miles; all are mountainous. There is a good rainfall 
and the volcanic soil is productive, although severe gales and occa- 
sional hurricanes sometimes occasion great damage to crops. 
Copra and cocoa are the chief exports. The islands were explored 
by de Bougainville in 1768 and missionaries went there in 1830. 

The natives are Polynesians, light reddish-brown or copper-col- 
ored, well-formed and erect, with strong features, high foreheads, 
and soft black hair a handsome race. 48 Robert Louis Stevenson 
described them as "a gentle race, gentler than any in Europe." 
The white men, as usual, brought diseases to the islands, and in 
1830 during an epidemic of influenza part of an evening prayer 
of the principal family to its god was : "Drive away from us the 
sailing gods lest they come and cause disease and death." 

The interest of the United States in the Samoan Islands be- 
came lively in the third quarter of the nineteenth century on 
account of their strategic location in the south Pacific at a cross- 
roads in the Panama, California, Hawaii, New Zealand, and Aus- 
tralia trade routes. In both Hawaii and Samoa there was a tri- 
angular interest on the part of foreign nations ; in the former, as 
mentioned earlier, it was on the part of England, France, and 
the United States; in the latter Germany took the place of 
France. By the middle of the nineteenth century these three na- 
tions had their commercial agents at Apia in Samoa ; in trade and 
commerce the Godeffroy house took the lead. In 1872 Commander 
R. W. Meade of the U.S. SS. Narragansett signed a treaty with a 

47 43 Statutes, 1357. 

** General Report by the Governor of American Samoa (1927), p. 5. 


chief on the island of Tutuila for the exclusive control of Pago 
Pago Harbor, perhaps the finest in the Pacific; in exchange the 
local chief was to receive the "friendship and protection" of the 
United States. The treaty failed of confirmation by the Senate. 
In the following year President Grant sent a German- American, 
Col. A. B. Steinberger, as United States commissioner to investi- 
gate and report. As a result of his mission a request was sent 
to the United States Government that the islands be given its pro- 
tection. This the Government was not ready to extend. Stein- 
berger was allowed, at his own wish and expense, to return to the 
islands as commissioner. Arriving in 1875 for the second time, 
Steinberger intervened in domestic political situations and gave 
the rulers to understand that the islands had been placed under 
American protection. His actions and pretensions were investi- 
gated and disavowed in 1876 ; he was shortly afterward deported, 
but not before he had succeeded in bringing about a civil war 
which resulted in the appearance at Apia of a British war vessel. 
To prevent possible annexation by Great Britain the American 
consular representative acted for a time in conjunction with the 
Germans ; upon two occasions, 1877 and 1878, he proclaimed an 
American protectorate over Samoa. Both proclamations were dis- 
avowed by Washington which found it easier to hope for a 
"stable, independent government" than to assume responsibilitv 
for a protectorate. In the latter year, nevertheless, still desirous 
of Pago Pago, the United States signed a treaty in which it 
agreed to use its good offices in the mediation of difficulties which 
Samoa might have with European nations, and obtained permis- 
sion to establish a coaling station at Pago Pago. 49 Naturally 
Great Britain and Germany made similar agreements in the fol- 
lowing year for harbors and coaling stations. 

During the next twenty years a threefold triangular struggle 
went on in Samoa: plotting and counter-plotting by Samoans 
among themselves and with the foreigners, complicated by the in- 
trigues and civil wars of King Malietoa Laupepa (and after his 
death in 1898 his son, Tanu), Vice-King Tamasese, and aspir- 
ant-to-the-throne, Mataafa; trade rivalry continued among the 

49 Senate Executive Document, 2, 46-1, 1879. 


Americans, English, and Germans ; diplomatic struggles verging 
on warfare went on among their governments and governmental 
representatives. The chiefs more than once offered the islands to 
Great Britain. The "unwarranted interference" of the Hawaiian 
Government irritated the Germans; "so might a fly irritate 
Caesar," wrote Stevenson. On March 16, 1889, apparently only 
the breaking of a hurricane over the harbor of Apia, where three 
American, one British, and three German warships were lying, 
stripped for action, prevented a naval battle. 

Seas that might have awakened surprise and terror in the midst of 
the Atlantic [writes Stevenson] ranged bodily and (it seemed to ob- 
servers) almost without diminution into the belly of that flask- 
shaped harbour; and the warships were alternately buried from view 
in the trough, or seen standing on end against the breast of billows. 
. . . Thus, in what seemed the very article of war, and within the 
duration of a single day, the sword-arm of each of the two angry 
powers was broken; their formidable ships reduced to junk; their 
disciplined hundreds to a horde of castaways. . . . Both paused 
aghast ; both had time to recognize that not the whole Sainoan Archi- 
pelago was worth the loss in men and costly ships already suffered. 
The so-called hurricane of March 16th made this a marking epoch in 
world history; directly, and at once, it brought about the Congress 
and treaty at Berlin; indirectly, and by a process still continuing, 
it founded the modern navy of the States. 50 

From April to June, 1889, commissioners of the three Powers 
met in Berlin where they agreed to impose upon Samoa an 
autonomous government without consulting the wishes of the 
people or their rulers ; this was little more successful than the 
earlier system of tripartite rule and protection by the Powers. 
On the death of King Malietoa in 1 898 the Americans and Eng- 
lish recognized his son, Tanu, as king, while the Germans sup- 
ported Mataafa whom the Samoans generally wanted as king. 
Rear Admiral Kautz on the U.S. SS. Philadelphia was sent to 
support Tanu. He ordered the dissolution of Mataafa's govern- 
ment; the latter, supported by the German consul, did not ac- 
quiesce, and the American ship bombarded Apia on March 15; 

co Robert Louis Stevenson, A Footnote to History, chap. x. 


American and British marines were landed to fight the Samoans ; 
and shortly the American and two British warships bombarded 
other towns along the coast which were in sympathy with Ma- 
taafa. The Germans took no part in these demonstrations, having 
been severely criticized by the American Commander Leary a dec- 
ade earlier when their gunboat, the Adler, had done what the 
Americans and British were now doing, but the Kaiser made a 
furious attack on Lord Salisbury in a letter to Queen Victoria. 

This way of treating Germany's feelings and interests has come 
upon the people like an electric shock and has evoked the impression 
that Lord Salisbury cares for us no more than for Portugal, Chile 
or the Patagonians, and out of this impression the feeling has arisen 
that Germany was being despised by his Government, and this has 
stung my subjects to the quick. 51 

This drew a rebuke from his imperial grandmother, "... I doubt 
whether any Sovereign ever wrote in such terms to any sovereign, 
and that sovereign his own Grand Mother about her Prime Minis- 
ter." 62 

In these affairs there was not much to choose among the three 
Powers, and on the whole their attitude toward the aspirants to 
the kingship and the natives was dictatorial, faith-breaking, and 
at times cruel. 

In 1899, by a tripartite convention, Great Britain agreed to 
renounce its claims in Samoa for compensation elsewhere, and the 
archipelago was divided between Germany and the United States ; 
Germany received the larger and more populous islands in the 
western part of the group and the United States those to the east, 
including Tutuila with Pago Pago, the best naval base in the 
South Seas. This convention did not grant sovereignty to the 
United States since Great Britain and Germany merely renounced 
in favor of the United States all their claims to the eastern is- 
lands. In 1904 President Roosevelt accepted the cession .of the 
eastern group, which became American Samoa, made by the island 
chiefs in 1900. The government of these islands is by Executive 
Order with administration through the Navy Department. Not 

si Die grosse Politik der europciischen Kabinette (1871-1914), XIV, 615. 
02 Ibid., p. 620. 


until 1929 08 did the 70th Congress formally accept the cession of 
the eastern Samoan Islands and appoint a commission for in- 
spection of the islands with a view to formulation of legislation. 
The commission consists of two senators, two members of the 
House, and three to be appointed from the chiefs of the island of 
Eastern Samoa. Its visit of inspection is likely to take place in 
1930. In American Samoa the imports for 1926 were $148,163, 
and the exports $78,033, practically all copra. 54 The population 
in 1930 numbered 10,055. 

If the United States possessed additional islands south of the 
equator, the strategic value of American Samoa would be in- 
creased. In 1910 Secretary Knox made a tentative offer for the 
Galapagos Islands, which are 500 miles west of Ecuador, but 
negotiations were discontinued because of adverse public opin- 
ion in Ecuador. There seems to be no evidence that the United 
States Government has tried to obtain the French islands in the 
South Seas, but the rumors that these islands might be accepted 
as part payment of the War debt to the United States led the 
French Government to state in 1920 that no cession of the French 
islands was contemplated. 55 In 1914 New Zealand forces occupied 
German or Western Samoa. 

Pacific Mandates. 

The situation in the Pacific has been altered as a result of the 
World War by the creation of British, Australian, New Zealand, 
and Japanese mandates over former German island possessions. 
President Wilson had succeeded at Paris in having the secret 
treaties of 1917 abrogated and the mandate system substituted. 
The principles of the mandate are stated in Article 22 of the 
Covenant of the League. 

To those colonies and territories which as a consequence of the late 
war have ceased to be under the sovereignty of the States which for- 
merly governed them and which are inhabited by peoples not yet able 
to stand by themselves under the strenuous conditions of the modern 

03 Public Resolution 89, amended by Public Resolutions 3 and 11 of the 71st 

04 Statesman's Year-Book, 1929, p. 627. 

G* George H. Blakeslee, Foreign Affairs, October, 1928, p. 143. 


world, there should be applied the principle that the well-being and 
development of such peoples form a sacred trust of civilization and 
that securities for the performance of this trust should be embodied 
in this Covenant. 

The best method of giving practical effect to this principle is that 
the tutelage of such peoples should be entrusted to advanced nations 
who by reason of their resources, their experience or their geographi- 
cal position can best undertake this responsibility, and who are will- 
ing to accept it, and that this tutelage should be exercised by them as 
Mandatories on behalf of the League. 

There are territories, such as South-West Africa and certain of 
the South Pacific Islands, which, owing to the sparseness of their 
population, or their small size, or their remoteness from the centres 
of civilization, or their geographical contiguity to the territory of 
the Mandatory, and other circumstances, can be best administered 
under the laws of the Mandatory as integral portions of its terri- 
tory, subject to the safeguards above mentioned in the interests of 
the indigenous population. 

Article 2 of the "C" Mandates in the Pacific further defines the 
powers of the Mandatory. 

The Mandatory shall have full power of administration and legis- 
lation over the territory subject to the present Mandate as an in- 
tegral portion of the Commonwealth of Australia, and may apply 
the laws of the Commonwealth of Australia to the territory, subject 
to such local modifications as circumstances may require. 

The Mandatory shall promote to the utmost the material and 
moral well-being and the social progress of the inhabitants of the 
territory subject to the present mandate. 

The desire of President Wilson to deprive these islands of mili- 
tary significance resulted in the prohibition of military training 
of the natives except for purposes of internal police and local de- 
fense, and of the erection of military and naval bases or fortifica- 

In May, 1919, the Allied Supreme Council of the Peace Con- 
ference awarded the "C" Mandates over the German islands of the 
Pacific ; that over Nauru was given to the British Empire, that 
over German Samoa to New Zealand, that over Kaiser Wilhelms- 
land (German New Guinea) and the Bismarck Archipelago to 


Australia, that over the German islands in the North Pacific, i.e., 
the Pelew, Caroline, Mariana, and Marshall Islands to Japan. 
This award was confirmed by the Council of the League in 1920. 
In connection with the dispute over Yap, the broad contention 
made by the United States was that mandates were ineffective 
without the participation in the award of the United States, 
which had been one of the Powers associated in the victory over 
Germany; it maintained further that the provision of the sixth 
paragraph of Article 22 of the Covenant allowing the administra- 
tion of the "C" Mandates "under the laws of the mandatory as 
integral portions of its territory" is inconsistent with the theory 
of the administration of these dependent peoples as "a sacred 
trust for civilization." The objections were abandoned in respect 
to Yap and the other Japanese mandates when in 1922 the United 
States signed a treaty in which it accepted the authority of 
Japan as mandatory over the islands. At this time Secretary 
Hughes told the Japanese that he would not press the issue of 
natural resources since he understood that the islands had no 
natural resources worth considering. As yet the United States 
Government has not officially recognized the legality of the Pa- 
cific mandates of Australia, New Zealand, and Great Britain. 

Such questions, relating to the mandatory system, as the locus 
of the power to amend the mandates, the entity in which sover- 
eignty over mandated areas resides (if indeed it is necessary that 
"sovereignty" should be found somewhere), the extent and appli- 
cation of the principles embodied in the Covenant for the protec- 
tion of native populations, such questions as these, at present 
mainly academic as international problems, may raise difficulties 
hereafter. One which has arisen in practical form is that men- 
tioned later in connection with the discussion of Samoa, viz., the 
existence and the extent of any obligation on the part of the 
Mandatory to allow equal opportunities to other members of the 
League of Nations or of other countries whatsoever for trade and 
commerce, migration and residence, and similar matters. The 
Japanese at the beginning of the discussion on mandates at the 
Paris Conference demanded full equality in these matters for 
Japan, presumably also for the nationals of all other countries. 


From the fundamental spirit of the League of Nations, and as the 
question of interpretation of the Covenant, His Majesty's Govern- 
ment have a firm conviction in the justice of the claim they have 
hitherto made for the inclusion of a clause concerning the assurance 
of equal opportunity for trade and commerce in "C" mandates. But 
from the spirit of conciliation and cooperation and their reluctance 
to see the question unsettled any longer they have decided to agree to 
the issue of the mandate in its present form. That decision, however, 
shall not be considered as an acquiescence on the part of His Im- 
perial Japanese Majesty's Government in the submission of Japanese 
subjects to a discriminatory and disadvantageous treatment in the 
Mandated territories; nor have they thereby discarded their claim 
that the rights and interests enjoyed by Japanese subjects in these 
territories in the past should be fully respected. 50 

The United States, aligning itself with Japan, contends also 
for the open door principle in the mandated areas, including free- 
dom of immigration. In adjusting the controversy over Yap, by 
the Treaty of 1922, the United States consented to the Japanese 
mandate, on the condition that the United States, although not 
a member of the League, receive the benefits of the engagements 
of Japan with members of the League in regard to these islands, 
that American missionaries reside and establish schools there, that 
American nationals hold property on a basis of equality with 
Japanese or any other nationals, and that the existing treaties 
between the United States and Japan be applicable to the man- 
dated territory this provision virtually means the right to trade. 
Also, by Article 3 of this Treaty the United States obtained the 
right for its nationals to land and operate the existing cable of 
Yap-Guam and any cable which it may wish to build. At Paris, 
President Wilson had taken the position that this cable should be 
internationalized, but, in spite of his verbal reservations in regard 
to Yap, the award of the island, as a mandate to Japan, was made 
by the Allied Supreme Council and confirmed by the League 
Council. The Guam- Yap- Shanghai cable, formerly owned by the 
Germans, whose Shanghai end had been pulled up to one of their 
own islands by the Japanese, was a shorter and safer route to 
China than the American-owned Guam-Philippines-China cable, 

6 League of Nations, Official Journal, January-February, 1921, p. 95. 


hence the desirability of some share by Americans in the operation 
of a cable with such advantages both for commerce and for com- 
munication with the Far East. 

In 1927 the total exports from the Japanese mandated islands 
amounted to 7,867,955 yen, of which 7,827,346 yen worth went to 
Japan; the total imports were 3,814,511, of which 3,621,167 
came from Japan. 57 

The British Dominions have never agreed to the theory of 
equality in the "C" mandated territories. The chief condition, 
they contend, on which they agreed to the application of man- 
dates to the territories which they wished to annex was that the 
principle of equality for other members of the League should not 
be applied to these territories. According to their interpretation, 
"the safeguards ... in the interests of the indigenous popula- 
tion," which the last clause of Article 22 of the Covenant requires 
them to apply, do not include equality of commerce. 58 

In the Australian mandates the Australian Parliament legis- 
lates for the territory ; Australian legislation is ordinarily not in 
force, but the Governor General of Australia may issue ordi- 
nances which become laws unless disallowed by the Australian 
Parliament. The Commonwealth Immigration Act of 190120 ex- 
tends the principle of "white Australia" to the mandated areas, 
virtually excluding all but "white" immigrants. Australia has not 
applied preferential tariff rates, as New Zealand has done in 
Samoa, but a New Guinea Trade Agency at Sydney controls 
most of the New Guinea trade, buying government supplies for 
the plantations expropriated from Germans. The United States 
has no treaties with Australia giving it any kind of commercial or 
economic rights and privileges, and is therefore not in a position 
to contend, as it did in the case of the Japanese mandates, that a 
commercial treaty with the Mandatory as to its own territory 
must be extended to the areas which it has taken under mandate. 

G 7 Annual Report to the League of Nations on the Administration of the South 
Sea Islands under Japanese Mandate, 1928, p. 105. 

ss For the counter-arguments, e.g., that equality of commerce is in the interest 
of the native population, and that the mandatory administration is carried on in 
behalf of the League and not of the Mandatory, see Elizabeth Van Maanen-Hel- 
mer, op. cit. 


The "Samoa Act" of 1921 and amending act of 1923 form the 
constitution for former German Samoa, now under mandate to 
New Zealand. There is a New Zealand administrator, assisted by 
a legislative and a consultative council, but the New Zealand 
Parliament legislates, and the Governor General of New Zealand 
with the consent of the Executive Council may issue Orders in 
Council applicable to Samoa. New Zealand regulates its immigra- 
tion restrictions by permits issued in accordance with an inde- 
terminate quota system. There is considerable native unrest, and 
some of the natives have petitioned that the mandate be trans- 
ferred to Great Britain or to the United States. 

The number of natives in Western Samoa in 1928 was esti- 
mated to be 39,215 ; Chinese and Melanesian laborers numbered 
965 and 147 respectively. 59 In 1928 the total trade of the man- 
dated territory was 748,728, an increase of 108,381 over 
1927. 60 In 1920, by a New Zealand Order in Council, duties were 
fixed on foreign goods entering Western Samoa with preferential 
rates for British goods. The United States Government pro- 
tested to the British Foreign Office against this discriminatory 
tariff as a violation of the 1899 Convention of Berlin by which 
citizens of Great Britain, of Germany, and of the United States 
were to have equal rights of trade in the Samoa Islands. The 
question has not been settled. It is complicated by the objections 
of the citizens of New Zealand to the extension to American 
Samoa in 1920 of the United States coastwise shipping laws 
which exclude foreign shipping. 

Germany has indicated that since its entry into the League and 
upon the withdrawal of the armies of Rhineland occupation it 
will be free to ask for the return of some of its former colonies 
and to demand the full enjoyment of the commercial privileges of 
a member of the League, in consequence of which it may feel dis- 
posed to raise questions as to the discriminatory legislation of 
Australia and New Zealand applied to their respective mandated 

59 Mandated Territory of Western Samoa, Report for year ended March 81, 
1929, pp. 6 and 11. 
eo Ibid., p. 2. 


THE Survey, 1929, contained an examination of United 
States immigration policy, beginning with the minor condi- 
tions or limitations imposed by the states of the young repub- 
lic, continuing with the assumption of control by the federal 
government, and concluding with the erection of barriers against 
the rising waves of immigration, as the demand for unskilled 
labor decreased and Congress reached the conclusion that the 
"new" and growing immigration from east and southeast Europe 
was less assimilable than that which preceded 1890. 

That study took into account the conditions and impulses 
which have determined the volume and character of immigration 
from Europe, and discussed the biological theories which have 
been advanced in favor of a free or a restrictive immigration 
policy, and the various proposed bases of restriction. Oriental im- 
migration was considered only in so far as it contributed to the 
development of an American exclusion policy and sequent legisla- 
tion. The following account is intended to round out the subject 
by giving the movements of population which directly interest 
the United States in the vast stretches bordering on the Pacific. 

The subject gains an additional interest from the effect of 
population growth and movement on political attitudes. In the 
time of the Grand Monarque, Vauban said that "the number of 
their subjects measures the grandeur of kings." Napoleon ex- 
pressed the same idea more brutally in answering Madame de 
StaePs question as to who was the greatest woman of all time, 
"She, Madame, who furnished the most cannon-food at her coun- 
try's need." 1 A twentieth-century Mussolini sees power in the 
same terms: "In disciplined, enriched, cultivated Italy there is 
room for 10,000,000 more men. Sixty million Italians would make 
their weight felt in the world." 2 Vaguely but generally associated 
with the numbers of citizens is state power. European nationalism 

1 Both quotations are from Edward M. East, Mankind at the Crossroads, p. 51. 

2 Gerarchia, September, 1928. 


includes the idea that the surest measure of a country's greatness 
is a rapidly and continuously waxing population; as betweer 
strong nations, well organized, equal in national genius and 
possessing equal resources, superiority in war may well lie witt 
the nation which has preponderant numbers. Ignoring the con- 
ditions under which this thesis is valid, the popular mind has ap- 
plied it to the comparison of strong nations with those looselj 
organized, and has persuaded itself that numbers measure 
strength and that the nation which multiplies the fastest outf oots 
all others in the contest for existence. The contrast between the 
nine hundred and fifty millions of Asia and the one hundred and 
twenty millions of the United States inspires a genuine appre- 
hension no less than the more rabid fears associated with the 
"yellow menace." 

Apprehension is felt in certain quarters regarding an alleged 
decline of the old American stock. In the early period of English 
settlement in America the population grew rapidly by natural in- 
crease. The early American families justified, with remarkable 
frequency, the estimate of Matthews Duncan that "a normal 
woman among civilized races living in wedlock throughout the 
mature period under favorable circumstances should bear from 
ten to twelve children. 5 ' 8 But in the course of fifty years the in- 
crease and wider distribution of prosperity, the growth of in- 
herited wealth, and the various factors associated with a higher 
standard of living, though stimulating certain cooperative and 
collectivistic practices, yet have induced a spirit of individualism 
and a loosening of traditions. In consequence there have appeared 
in this country the population tendencies that have long char- 
acterized France and now characterize most of Europe, i.e., a 
decline in the number of births averaged to each woman of breed- 
ing age. As yet the declining death rate still permits an actual 
increase of population but the composition of the population is 
changing ; there are relatively fewer women of child-bearing age, 
and the present maintenance of gross numbers may mask the po- 
tentiality of a future decline. 4 

3 A. M. Carr-Saunders, The Population Problem, p. 100. 

4R. R. Kuczynski, The Balance of Births and Deaths (New York, 1928), I. 


Dwelling fondly in the past, political imagination can be easily 
excited by a contemplation of former cataclysms, and the sug- 
gestion of a historic parallelism. The population pressure of 
yellow multitudes is supposed to threaten the same dangers to 
American civilization as came to Rome from 

those fair warriors, the tall Goths, from the day when they led their 
blue-eyed families off Vistula's cold pasture-lands . . . and in the 
incontaminate vigor of manliness, . . . tore at the ravel'd fringes 
of the purple power. . . . 

and Malthus' classic picture of the "clouds of Barbarians" 5 still 
affects men's minds. Such events afford no parallel to present 
conditions. The hammer-strokes recorded by Malthus are bar- 
barian conquest-migrations in which whole races or segments of 
races were on the move. The condition of such events is the up- 
rooting of a whole tribe or the breaking off of an integral seg- 
ment, driven by restlessness and supported by hardy enterprise, 
powerful motives operating upon races of tremendous will. There 
is little danger that to the assistance of individual migration 
organized conquest will be brought by "yellow" people against 
"white" people who have encompassed and organized a territory 
politically and socially. 

Certainly there is no reason for governments to come into con- 
flict over such an issue. Experience has left no doubt that emigra- 
tion affords no more than the briefest relief to an increasing 
population pressure. The fecundity of China or Italy does not 
decline because Chinese or Italians emigrate, whether to Malay- 
sia, Brazil, California, or Italian colonies; population may even 
increase until it reaches the former pressure point. This was re- 
ported and understood in the eighteenth century : 

The population of the thirteen American states before the war 
was reckoned at about three millions. Nobody imagines that Great 
Britain is less populous at present for the emigration of the small 
parent stock that produced these numbers. On the contrary, a cer- 
tain degree of emigration is known to be favorable to the popula- 
tion of the mother country. 6 

6 Malthus, Essay on Population, chap. iii. 6 Ibid., chap. vi. 


Who can now find the vacancy made in Sweden, France, or other 
warlike nations by the Plague of heroism forty years ago ; in France 
by her expulsion of the Protestants ; in England by the settlement 
of her colonies ; or in Guinea, by one hundred years' exportation of 
slaves that has blackened half America? 7 

The solution of population congestion lies more in the direction 
of freedom of trade than of freedom of migration. Density of 
population becomes of less consequence under free specialized 
production and ease of communication and transportation. The 
term "over-population" implies the acceptance of some such 
criterion as Carr-Saunders calls an optimum number of people. 
Presumably this optimum is taken to be the number of people in 
a given area who with existing resources and arts of production 
can obtain the highest standard of living. The optimum popula- 
tion probably means increasing density as the arts of production 
become more efficient. It is also highly characteristic of the most 
prosperous modern nations that the densities of populations 
within their borders vary widely from place to place. 

Atlantic versus Pacific. 

Migration in the Pacific area is still in its infancy. As against 
the fifty-five million Europeans who traversed the Atlantic dur- 
ing the years 18201924, not more than one million Asiatics have 
crossed the Pacific to take up residence in the New World since 
the beginning of recorded migrations. 8 For the ten-year period 
preceding the World War the average yearly immigration from 
Europe, with its five hundred million people, was greater than 
the recorded immigration of all time from those Asiatic countries 

7 Benjamin Franklin, Observations Concerning the Increase of Mankind, 
Peopling of Countries, etc. (Boston, 1755). 

s "Prior to the establishment of current systems of migration statistics in the 
nineteenth century (Great Britain, 1815; United States, 1820) records and lists 
of emigrants were frequently kept." International Migrations (National Bureau 
of Economic Research, 1929), I, 78. 

In China, records were started at Ainoy in 1845; for Japanese records of pass- 
ports were begun in 1868, and emigration statistics are available since 1898. 

"Genuine migration statistics, distinguishing overseas from continental mi- 
grants and taking account of the more important movement of native labor, were 
introduced after the War." Ibid., footnote, p. 223. 


which lie in the western Pacific area and have an equal popula- 

Conditions of relatively recent origin account for these con- 
trasts in the flow of people. A hundred years ago the masses of 
Europe were almost as immobile as are those of Asia today. But 
a movement of liberation was born of the industrial and political 
revolutions. People's minds were awakened to the possibilities of 
individual enterprise, and with ease of movement of goods came 
the movement of human beings. Steam navigation afforded a 
ready means of transportation to the New World which needed 
strong arms and promised a more stable existence. 

Asiatic migration also was restricted by tradition and political 
barriers. Chinese overseas migration began in the seventh century 
with the settlement of Formosa and the Pescadores Islands. The 
resulting trade routes to British Malacca, the Dutch East Indies, 
and the Philippines led to the second migration beginning with 
the fifteenth century. The Malay Archipelago, Java, Sumatra, 
Borneo, the Sulu Archipelago, and the Philippines were colo- 
nized. In 1712 Chinese residing abroad were prohibited from re- 
turning home under penalty of death sentence. 9 As Chinese ports 
were opened by treaty, the third period of emigration began ; the 
numbers leaving the treaty ports were small at first, but when, 
about the middle of the nineteenth century, Spain, Portugal, 
Holland, and Great Britain began looking for labor for the in- 
dustrial and commercial development of their colonies and con- 
tract-coolie emigration was legalized, they increased and by 1873 
amounted to 13,016. 10 

"From 1636 to 1866 emigration from Japan was a capital 
offense, and the stream did not begin to flow freely until the 
eighties of the last century." 11 Indian overseas emigration began 
soon after the abolition of slavery in the British Empire in 1838. 
By a series of acts since 1837 the Government of India has pro- 
vided for the welfare of the emigrant and controlled the number 
to meet opportunities abroad. 12 

Ta Chen, Chinese Migrations, with Special Reference to Labor Conditions 
(Washington, 1923), p. 20. 

10 International Migrations, op. cit., I, 151. 

11 Ibid., p. 160. 12 Ibid., pp. 140 ff. 


Unlike the early European migrants yeomen colonists who 
crossed the Atlantic to till their own holdings in the New World 
the early Asiatic migrants were mainly indentured laborers 
who were imported to work on plantations in the West Indies or 
southern Pacific, or free laborers who came to assist the white 
pioneers in the development of their settlements in the coastal re- 
gions of North America, Australia, and New Zealand. Discoveries 
of gold stimulated immigration into California, Australia, New 
Zealand, and Canada, but even in these cases the number of ar- 
rivals was soon adjusted to the white pioneer's conception of his 
labor requirements. Remote from the centers of population and 
political control, the western white settlements had developed an 
unusual degree of local consciousness and corporate behavior, and 
they acted with great vigor in regard to Oriental immigration. 
Additional population was wanted for purposes of labor only. 
The Asiatics who came to the western seaboard of America or to 
the white settlements of the southern Pacific, found themselves 
associated with peoples of strikingly different racial and cultural 
traits which had developed during a long period of semi-isolation. 

Settlement Areas. 

Considered from the standpoint of population changes, the 
various Pacific regions vary greatly. Of the western Pacific 
countries only Japan and Java show rates of natural growth 
comparable with those of European peoples. Since Japan was 
opened to western commerce its population has risen from 
32,000,000 to 60,000,000, 18 and in fifteen years (1905-20) the 
population of the Netherland East Indies increased from 38,- 
070,389 to 49,350,834. 14 Neither of these populations has as yet 
shown any pronounced tendency toward emigration. In many 
respects the Japanese are more European than Asiatic. Their 
migrations bear a much closer resemblance to European migra- 
tions than to those of other Asiatics ; a western standard of living 
bars them from the plantation regions of the South Seas except 

is Problems of the Pacific (1927), Proceedings of the Second Conference of 
the Institute of Pacific Relations, Honolulu, 1927, p. 340. 
14 Commerce Yearbook, 1928, II (Foreign Countries), 439. 


in the capacity of Europeans, that is, as commercial and in- 
dustrial promoters. Only within recent years have the people of 
Japan begun to seek homes in foreign lands, and up to the 
present few Javanese have gone further than the plantation re- 
gions in neighboring islands. Two regions are notable for immi- 
gration British Malaya and Manchuria. The increase in the 
population of the former from slightly over a million in 1901 to 
3,332,603 (census data) in 1921, and of the latter from about 
14,000,000 in 1900 to 30,000,000 in 1928, is almost wholly at- 
tributable to net migration. 

In the Caucasian areas of the Pacific nearly all the settled re- 
gions attract immigration. About 30 per cent of the net annual 
gain in the population of Australia is due to migration. 16 In the 
three Pacific Coast states of the United States the population has 
a still larger proportion of newcomers. In 1920 only 30 per cent 
of the native white population of Washington was born within 
the state; the ratios for Oregon and California were 37.8 and 
37.3 respectively. 

Although climate influences not only the economic structure of 
an area but also the white man's appraisal of its fitness for set- 
tlement, both change with the growth of science and the improve- 
ment of communications. At one time the Pacific Coast was 
thought to be too remote for white settlement. A commission, ap- 
pointed to inquire into making "an establishment" at the mouth 
of the Columbia River in order to reap the benefits of the fur 
trade, recommended the importation of Chinese, with their wives 
and children, as settlers. Experience had shown, the commission 
said, that family life keeps men's minds "from pursuits which 
often in frontier countries lead to strife." 

And though the people of that country (China) evince no dispo- 
sition to emigrate to the territory of adjoining princes, it is be- 
lieved they would willingly, nay, gladly, embrace the opportunity 
of a home in America where they have no prejudices, no fears, no 
restraint in opinion, labor, or religion. 16 

IB Phillips and Wood, The Peopling of Australia (Melbourne, 1928), p. 52. 
10 Annals of Congress, Sixteenth Congress, Second Session, January, 1821, 
pp. 956-957. 


But once steamships and railways had made these salubrious 
areas accessible to western settlement a sudden change of attitude 
took place and "white" immigration policies were developed. 

White People in the Non-Caucasian Pacific. 

Although Europeans have been in contact with the peoples of 
eastern Asia for several centuries and in continuous intercourse 
since the middle of the nineteenth century, at present only a few 
western white people are resident there, and despite trade ex- 
pansion between eastern and western countries their number 
shows little tendency to grow. Moreover, except for a part of the 
missionary population, they are almost exclusively confined to the 
large modern coast cities which contain European quarters of an 
official or unofficial character. The European and American 
populations of Japan are almost stationary, the latter declining 
slightly from 1926 to 19272,134 as against 2,012 ; 17 the British 
population increased slightly in this interval but almost all the 
other European nationalities remained the same or decreased 
slightly. In China the total white population, excluding Russians, 
was only about 32,000 in 1927, of whom 11,714 were British, 
6,970 Americans, 2,588 French, 2,719 Germans, and 2,061 Por- 
tuguese. 18 Although Americans have had contact with China 
since clipper-ship days, not until after the Civil War did they 
begin to take up residence in China, and even then largely in the 
capacity of missionaries. According to Dr. Otte's figures there 
were 1,153 United States citizens in China in 1890 but only 
thirty-two American firms. During the next decade the number 
of firms increased to ninety-nine but the number of persons 
scarcely doubled. From 1900 to the present the ratio of Ameri- 
can firms to persons has steadily increased, amounting to one 
firm to every twelve American citizens in 1927 as opposed to one 
firm to every thirty-six persons in 1890. In 1923, the peak year 
of American population in China, about half of the total of 

IT Foreign office figures. 

is See Dr. Friedrich Otte, "Foreigners in China, A Statistical Survey," Chinese 
Economic Journal, III, No. 6, pp. 993-1002. 


12,530 were missionaries. By the beginning of 1928 the number 
had dropped to 8,569 of whom nearly half were in Shanghai. 19 

The West entered the East at the top of the occupation pyra- 
mid; the East entered the West at the bottom. This contrast in 
levels of invasion has important bearing not only upon inter- 
racial attitudes, the individual being taken as representative of 
his race, but also upon the duration of stay and the territorial 
distribution of foreign residents. The Oriental immigrants who 
came to America as unskilled laborers are gradually working up 
the economic ladder, and as they rise they become more widely 
distributed throughout the country. But the Westerner who 
enters Asia at the top of the occupational pyramid cannot de- 
scend in the economic scale ; when he fails to maintain his original 
status his homeland is his only refuge. On the other hand his posi- 
tion at the top is usually temporary ; in course of time the local 
people learn his technique and gradually displace him. 

According to the Committee on Industry and Trade, 20 the for- 
eign trade of Japan until about thirty years ago was almost en- 
tirely in the hands of non-Japanese merchants, mostly British. 
As the Japanese realized that a large share of the resulting pros- 
perity was going into foreign pockets, they organized firms, in 
some cases with indirect governmental aid, which gradually 
established branches in all parts of the world. A similar situation 
has evolved in China although because of political instability the 
Chinese have not yet been able to organize business to the same 
extent. The white populations of Hawaii and Malaya have been 
able to maintain their position at the peak of the occupation 
pyramid but are gradually being displaced by other races in mer- 
cantile and professional services. 21 

Japanese Migration. 22 

Japanese immigration may be divided into three periods: (1) 

19 See the succinct analysis of the present distribution and activities of the 
American population in China, by Mr. Julean Arnold, United States Commercial 
Attach^ in Peking: China, a Commercial and Industrial Handbook (1926). 

20 Survey of Overseas Markets (1927), p. 412. 

21 Andrew W. Lind, Journal of Social Forces, December, 1928, p. 293. 

22 For a more extensive discussion of Japanese immigration, see Survey, 1929, 
pp. 501 ff. 


prior to 1907, the year when the Gentlemen's Agreement went 
into effect; (2) from 1907 to the introduction of the exclusion 
measure in 1924; (3) from 1924 to the present. Japanese mi- 
gration has been much more definite and measurable than Chi- 
nese. From 1868, the year when the Secretary of State for For- 
eign Affairs began to issue passports to Japanese passengers 
going abroad, until 1924, when exclusion from the United States 
became effective, the Japanese Government has issued a total of 
1,187,566 passports to passenger citizens. Of this number 197,- 
902 were issued to persons going to continental United States, 
and 238,291 to persons going to Hawaii together constituting 
36.7 per cent of the total of passports issued. During the same 
period 30,491 passenger citizens left for Canada, 12,261 for 
Mexico, and 49,668 for various South American countries, mainly 
Brazil and Peru. 23 Inasmuch as emigrants constitute a large per- 
centage of the total outflow, the statistics are significant in show- 
ing the leading streams of emigration. 

Although Japanese overseas emigration began about 1866, it 
did not amount to more than 1,554 until 1885, when 3,461 left 
the country, of whom 1,959 went to Hawaii. Arrangements were 
made by the Kingdom of the Hawaiian Islands with the Empire 
of Japan for the bringing in of contract laborers to work on 
sugar plantations. This marked the beginning of Japanese mi- 
gration to those islands, and Hawaii remained the leading desti- 
nation until 1908, receiving until 1891 almost half of the total 
number of Japanese going abroad. In 1893 the total number of 
passports issued by the Japanese Government to citizens going 
abroad was 13,669, in 1895 it increased to 22,411, and in 1896 
to 27,665. Ten years later, during the Russo-Japanese war, 
19,466 passenger citizens left Japan. The following year, 1906, 
was the peak year of Japanese immigration to Hawaii, and 
58,851 passports were issued of which 30,393 were to persons 
going to Hawaii and 8,466 to persons going to continental 
United States. 24 Inasmuch as Hawaii was by this time an integral 
part of the United States, many of these crossed to the continent 

23 Facts compiled from International Hit/rations, op. cit., I, 934. 

24 Ibid. 


without any official record being made of their entry. Their ar- 
rival occasioned alarm in the Pacific Coast states and resulted in 
an Executive Order of March 14, 1907, which ordered that 

Japanese or Korean laborers, skilled or unskilled, who have received 
passports to go to Mexico, Canada, or Hawaii, and come therefrom, 
be refused permission to enter the continental territory of the 
United States. 

A short time later the so-called Gentlemen's Agreement was con- 
summated according to which the Japanese Government agreed 
to refuse passports to laborers, skilled or unskilled, seeking to 
enter continental United States. Similar restrictions were made 
applicable to the Hawaiian Islands and Mexico. By 1906 streams 
of migration had developed to Canada, Mexico, and Peru. The 
movement to Mexico lasted only two years, but by 1912 Brazil 
was receiving over a thousand passenger citizens. Meanwhile the 
migration to the south Pacific and other regions fluctuated in 
volume and varied in direction in response to legal limitations and 
economic conditions. The following table, furnished by the Japa- 
nese Embassy, shows the general distribution of Japanese in for- 
eign countries according to the latest statistics compiled by the 
Government : 


Male Female Total 

Asia 163,225 136,469 299,694, 

Europe 2,741 202 2,943 

North America 89,984 45,671 135,655 

South America 30,256 17,266 47,522 

Africa 49 23 72 

Oceania 69,108 48,374 117,482 

355,363 248,005 603,368 

The census returns by decades give a brief but significant ac- 
count of the growth of the Japanese population in continental 
United States and Hawaii. 25 

25 Prior to 1900, the first census in which Hawaii was included in United States 
data, the figures for Japanese in Hawaii are taken from Romanzo Adams, The 
Peoples of Hawaii (Institute of Pacific Relations, Honolulu, 1925), p. 7. 


Year Continental United States Hawaii 

1870 55 

1880 148 (1884) 116 

1890 2,039 12,860 

1900 24,326 61,111 

1910 72,157 79,675 

1920 111,010 109,274 

1922 115,186 112,221 

Net Immigration. 

The characteristic desire of Orientals to return home seems to 
warrant special consideration, as net rather than gross immigra- 
tion is significant. 26 From 1909 to June 30, 1929, 19,356 more 
Chinese left the United States than entered it, at least so far as 
official records are concerned, while the net increase in the Japa- 
nese population due to immigration was only 1,640. Undoubtedly 
the outward movement during this period was relatively much 
greater than in earlier years. By 1908 laborers of both groups 
had been excluded, the Chinese by the Act of 1882, and the Japa- 
nese by the Gentlemen's Agreement of 1907. These restrictive 
measures had reduced the inflow of Japanese immigrants from a 
total of 133,557 (1900-1908) to 60,308 (1909-17), and per- 
haps accentuated the return movement to the Orient as they im- 
plied agitation and prejudice on the part of Americans toward 
Orientals already here. 

Age and Sex. 

The age and sex composition of Oriental immigration merits 
some consideration not only because it concerns the Oriental 
population of the country, but also because it affects the ad- 

2Q A word of caution should be given with regard to the interpretation of 
migration statistics. The common practice has been to gauge net immigration by 
subtracting the number of emigrant aliens from the number of immigrant aliens 
and to assume that the difference represents net immigration. While this prac- 
tice is fairly sound with reference to European migration it is misleading when 
applied to Orientals. A more nearly reliable criterion of net Chinese and Japa- 
nese immigration is found by subtracting the total departures from the total 
arrivals irrespective of status classification. Data for this are available only since 
1908. "Taking the figures for a recent period as a guide, aliens of the returning 
resident class comprise over three-fifths of the Japanese nonimmigrants, about 
one-fourth of the Chinese nonimmigrants, and a little over one-half of the Euro- 
pean nonimmigrants." From a letter written by Harry E. Hull, Commissioner- 


ministration of the immigration law. Chinese immigration tends 
to be predominantly male, as indicated by the sex ratios in the 
different regions of settlement. In Australia the ratio of Chinese 
males to females is 16 to 1 ; in New Zealand about 14 to 1 ; in 
Canada, 35 to 1 ; in British Malaya, 12 to 1. This sex disparity 
is striking also in continental United States, although there is 
a tendency toward equalization. In 1900 the ratio of Chinese 
males to females was 21 to 1 ; in 1910, 16 to 1 ; in 1920, 8 to 1. 
The ratio for Hawaii is more nearly normal; in 1920 there were 
only about 2 males to 1 female. In all places from which further 
immigration is barred, the effect of this sex disparity tends to 
leave the Chinese a declining population until the proportion of 
the sexes is approximately equalized in the second or third gen- 
eration. The Chinese population of the United States has shown 
a substantial decrease in each of the last three census returns and 
the 1930 census will doubtless show a still further decline. 

Maintenance of their families in China by Chinese men in 
America adds to the burdens of immigration officials. Under 
present legal restrictions, the two main classes of Chinese ad- 
mitted are the children, mostly males, of "treaty merchants" 
(Treaty of 1880), and Chinese United States citizens who have 
acquired citizenship by virtue of the fact that either they them- 
selves or their fathers were born here. The latter constitute about 
a third of the total number of Chinese admitted. Between 1925 
and 1929, 15,405 Chinese American citizens entered the United 
States. The problem of proving legal right to entry is the source 
of much irritation and misunderstanding. 27 

In the case of Japanese immigration the early preponderance 
of males was temporary. As soon as the young men became settled 
in the country they straightway sought to establish family life. 
Although the percentage of married males, fifteen years and over, 
to all males, was about the same for the Chinese and Japanese in 
1920, 49.7 and 54.5 respectively, the proportion of married Japa- 
nese having their wives in the United States was almost six times 
that of the Chinese. 

27 See R. D. McKenzie, Oriental Exclusion (Chicago, 1928), chap, v; and Sur- 
vey, 1929, p. 500. 


This tendency on the part of Japanese immigrants to establish 
family life has an important bearing on their selection of occupa- 
tion as well as upon the growth of the local Japanese population. 
It has contributed to the withdrawal of Japanese from Hawaiian 
sugar plantations, Alaskan canneries, and western camp life, and 
to their adoption of more settled occupations. In 1907, 2,685 
Japanese were employed in logging camps in Washington but by 
1924 the number had declined to 1,458, although the total num- 
ber of employees in the industry had increased 30 per cent during 
this period. Moreover the Japanese who remain in the logging in- 
dustry have to an unusual extent settled in the more stable camps 
where they could live with their families. Thus while the Chinese 
population in the United States is steadily declining, the number 
of Japanese is gradually increasing owing to excess of births over 

East Indian Migration. 

As far as the United States is concerned Chinese and Japanese 
are the only Asiatic groups in the Pacific area which in the past 
have caused immigration problems. East Indian migrations in 
the Pacific have been largely confined to British possessions ; only 
an insignificant number have found their way into the United 
States. The census does not record East Indians separately but 
the Commissioner General of Immigration reports only 8,474 
East Indian immigrant aliens between 1899 and 1929; between 
1908 and 1929, 2,691 emigrant aliens departed. Prior to 1907 
East Indian migration to the United States and Canada was neg- 
ligible, never more than one or two hundred a year and usually 
less. The increase in 1907 to 1,072 caused no alarm in the United 
States, but in Canada an increase to 2,124 28 resulted in the Con- 
tinuous Passage Ordinance (Order in Council, P.C. 23), an order 
which caused 372 Indians to be denied admission upon arrival 
at Vancouver on board a Japanese ship, the Kamagata Maru, 
chartered by a Sikh labor contractor. 

Although Indian migration to the United States showed no 

28 As the system of recording migration statistics was changed in this year, 
this figure is for nine months only. 


tendency to increase, the Canadian incident and the fear of prob- 
able East Indian immigration at the conclusion of the World 
War sufficed to bring about the Barred Zone Provision in the 
Immigration Act of 1917. By this Provision no immigrants were 
allowed to enter from India or other parts of the western Pacific 
not already covered by restrictive measures. 

The Philippine Islands. 

Coming to the Philippines in the tenth century, the Chinese 
competed with the Arabs there and by the twelfth century had 
driven them out. During the two and a quarter centuries of Span- 
ish occupation the policy toward the Chinese "alternated between 
contemptuous toleration, attained apparently by wholesale 
bribery, and brutal attempts to exterminate them by massacre." 29 
In 1898 there was a resident Chinese population of about 40,000 
(41,035 in 1903). As soon as the islands came under the juris- 
diction of the United States, measures were taken to exclude the 
Chinese. On September 26, 1898, General Otis "issued a military 
order applying the American exclusion laws to the islands." 30 
Despite the protest of the Chinese Minister, the United States 
Government in 1902 ratified the order by officially extending its 
Chinese exclusion laws to the Philippines. 

During the first two decades of American occupation, the resi- 
dent Chinese population showed little tendency to increase, the 
official census of 1918 recording 43,802, only 2,767 more than 
the census of 1903. In recent years Chinese residents in the 
Philippine Islands seem to be increasing more rapidly, as in 1926 
their numbers were estimated at 60,000. 81 The estimates of smug- 
gled entries vary widely but in any case the recorded net in- 
crease of Chinese aliens between 1925 and 1929 was 14,430; in 
1929, 18,385 Chinese aliens arrived and 15,062 departed. 32 

As in many other parts of the south Pacific the Chinese in the 
Philippines serve as middlemen between the Malay peoples and 
their western rulers. Their experience, industry, and clannishness 

29 H. F. McNair, The Chinese Abroad, p. 88. ^ Ibid., p. 89. 

si W. Cameron Forbes, The Philippine Islands, I, 17. 

32 Annual Reports of the Commissioner General of Immigration. 


have put most businesses into their hands. They are engaged 
extensively in the retail and interprovincial services distributing 
imported merchandise and collecting from the natives most of the 
export products. 83 

Japanese immigration is of relatively less significance, mostly 
confined to Davao province on Mindanao. The census of 1908 re- 
corded only 921 Japanese, that of 1918, 7,806, and the latest of- 
ficial information, October, 1928, furnished by the Japanese For- 
eign Office, puts the number at 14,000. Between 1925 and 1929 
a total of 13,102 Japanese entered the Philippines and 5,781 de- 
parted, a net increase of 7,321. 84 

Filipino Migration. 

The tables 35 show that Filipinos and Mexicans also, in the 
case of the Alaska fisheries are replacing the Chinese and Japa- 
nese as laborers in the industries cited. The process is a replacing 
rather than a displacing one. The earlier immigrants have gradu- 
ated to independent agriculture or are concentrated in urban 
centers. Although going on for years, this "ascensive process" 
does not become apparent until legislation stops the stream of 
new recruits. The labor vacuum thus developed at the base of the 
occupation pyramid is filled by the importation of a different 
ethnic stock. Wave after wave of different cultural and racial 
groups has been brought into Hawaii as plantation workers. 
Portuguese, Chinese, and Japanese have served their apprentice- 
ships in the sugar-cane fields and then moved to the urban centers 
or withdrawn from the islands entirely; now Filipinos are filling 
in the ranks. When the Act of 1883 imposed restrictions on Chi- 
nese immigration Japanese laborers were imported to Hawaii. 
Again, when the Agreement of 1907-8 cut off the supply of 
Japanese workers the planters of Hawaii turned their attention 
toward the Philippines which by this time had become a terri- 
torial possession of the United States. In 1910 and 1911, 4,930 
Filipinos were introduced into Hawaii by the Hawaiian Sugar 

33 See Philippine Islands, A Commercial Survey (U. S. Bureau of Commerce, 

s* Annual Reports of the Commissioner General of Immigration. 
as See p. 342. 


Planters 5 Association. Between 1912 and 1924, 52,626 Filipinos 
went to Hawaii. 86 In 1929, 8,369 Filipino emigrants left for 
Hawaii, and 3,991 returned. Most of this migration is the result 
of a highly organized system of recruiting carried on by the 
Hawaiian Sugar Planters' Association, and, in accordance with 
an Act of 1915, under the supervision of the Philippine Govern- 
ment. The planters are required to give free transportation, to 
pay a minimum wage "of 40 pesos per month of 26 days ... to 
give free rent, water, fuel and medical attendance" during the 
period of employment. 87 

A considerable part of the Filipino migration to Hawaii passes 
on to the mainland where wages are higher and opportunities for 
advancement more promising. As late as 1910 the census recorded 
only 160 Filipinos in continental United States; by 1920 the 
number had increased to 5,603. Since 1920 and especially since 
the passing of the Exclusion Act in 1924 the stream of incoming 
Filipinos has increased rapidly with a proportionately diminish- 
ing number of returns. In recent years it has taken two courses, 
one flowing from Hawaii and the other direct from the Philip- 
pines. From July 1, 1924, to June 30, 1929, inclusive, 26,006 Fili- 
pinos, 38 mostly young male laborers, arrived in continental United 
States ; during the same period 9,790 came from Hawaii. In 1929, 
11,360 Filipinos arrived in Pacific Coast ports of continental 
United States, of whom 8,689 came from the Philippines, 2,654 
from Hawaii, and 17 from other places. 89 

In December, 1929, there were approximately 50,000 Filipinos 
in continental United States, the great majority of whom were 
concentrated in California and Washington. Unlike the Chinese 
and Japanese groups who maintain their own local institutions 
and services, the Filipino immigrants rely upon the institutions 
of the larger community, coming into contact with the organized 
charities, the public health service and other welfare organiza- 
tions. Those of the new arrivals who succeed in finding employ- 
so International Migrations, I, 1022. 

37 Monthly Record of Migration, April, 1927, pp. 146-147. 

ss War Department, Bureau of Insular Affairs, Communication, June 2, 1930. 
80 Annual Report of the Commissioner General of Immigration, 1929, p. 230. 


ment enter the unskilled occupations vacated by the rising group 
of Orientals who preceded them. Although definite occupational 
data are lacking, general observation and report indicate that 
the Filipino immigrants are concentrating in the unorganized 
domestic services, as waiters, house-boys, elevator operators, and 
hospital attendants; they are also serving as transient laborers 
in the truck-gardening areas, in the canneries, and railway 
gangs. They come into competition with Mexicans, Negroes, and 
to a certain extent with female workers. Representative leaders 
of the Negro colony in Seattle assert that as a result of Filipino 
competition the colored population of that city has decreased by 
about two thousand during the last four years. Ever since the 
Philippines became a possession of the United States a small but 
increasing number of Filipino students have come to continental 
United States to enter the higher institutions of learning; the 
return movement has usually balanced this immigration. 

The problem of dealing with Filipino immigration is fraught 
with legal difficulties. The Filipinos are not aliens as defined by 
the 1924 Act and are therefore not subject to exclusion, but they 
are as different in culture and race from the people of continental 
United States as are any of the Asiatics already excluded. And 
now that they have begun to evince a tendency toward spon- 
taneous migration the movement to the mainland is entirely 
spontaneous, and since 1927 a considerable number have come to 
Hawaii of their own accord it is not surprising that the anti- 
Oriental organizations in the Pacific Coast states should direct 
their attention toward Filipino exclusion. In May, 1928, a bill 
to exclude Filipino immigrants was introduced by Congressman 
Welch of California, 40 and organized labor has gone on record 
as favoring "the immediate grant of independence to the Filipino 
people" chiefly for the reason that if the Philippines were an 
independent country Filipinos would be automatically excluded 
from the United States as aliens ineligible to citizenship. 41 

40 See Paul Sharrenberg, Pacific Affairs, February, 1929, pp. 49-54. 

41 The problem thus arising has a legal aspect as long as the Philippine Islands 
are under the political jurisdiction of the United States. Judge D. R. Williams, 
formerly a judge in the Philippines, has expressed the opinion that Congress is 


The British Dominions. 

During the development of policy and methods of dealing with 
Oriental immigration to the United States similar attitudes and 
legal devices, designed to stem Asiatic invasion, were forming in 
a number of other regions throughout the eastern and southern 
Pacific. The similarity of devices employed in the British Domin- 
ions suggests the contagion of fear and the reciprocal borrowing 
of procedure. The damming of the immigration stream at one 
point tended to divert it to others; this caused alarm, and the 
erection of barriers spread. Canadian experience with Oriental 
immigration has been almost identical with that of the United 
States. Attracted by the discovery of gold on the Fraser River 
sand bars, Chinese began entering British Columbia shortly after 
their first arrival in California. It is estimated that as early as 
1860 over 2,000 Chinese had entered. 42 In 1882 organized im- 
portation of Chinese coolies to work in the construction of the 
Canadian Pacific Railway began, and during the next two years 
15,701 were brought into the Province. 

By 1900 Japanese immigrants had begun to arrive in British 
Columbia. The white settlers became apprehensive and protested 
to the Dominion Government. The matter was brought to the at- 
tention of the Japanese Minister with the result that instructions 
were issued to Japanese local authorities to prohibit temporarily 
the migration of Japanese laborers into Canada and the United 
States. This order virtually stopped migration from Japan to 
Canada for the next five years although it had little effect on 
Japanese migration to the United States, 43 but following Presi- 
dent Roosevelt's proclamation which stopped the movement of 
Japanese laborers from Hawaii to continental United States, a 
new crisis arose in Canada, and riots occurred in Victoria and 
Vancouver. A "Gentlemen's Agreement" between Canada and 
Japan was then concluded which was similar in substance to the 

without constitutional authority to exclude Filipinos; Attorney General Webb of 
California finds nothing to prevent Congress from taking whatever action it 
chooses with regard to Filipino exclusion. "Filipino Immigration," The Common- 
wealth, Commonwealth Club of California, November 5, 1928. 

42 R. E. Gosnell and E. O. S. Scholefield, A History of British Columbia, p. 185. 

43 See Survey, 1929, p. 502. 


agreement between the United States and Japan, except that the 
number of passports to be issued by the Japanese Government 
to the admissible classes was not to exceed 400 a year. In March, 
1924, as a result of further negotiations between the House of 
Commons and the Japanese Government, the number of pass- 
ports to be issued annually was reduced from 400 to 150. 

Meanwhile Chinese immigration into Canada, which had been 
checked in 1885 by the imposition of a head tax of $50 which 
was doubled in 1901 and raised to $500 in 1903, rose again in 
1907-8, 1,482 paying the head tax in 1908; increasing num- 
bers continued to arrive, 7,445 entering in 1913. Agitation arose 
and an Order in Council, December 8, 1913, reduced Chinese 
immigration. During the World War only a few hundred arrived 
annually, but in 1918, 4,233 entered. The numbers decreased 
during the next years and the Chinese Immigration Act of 1923, 
which prohibits Chinese immigration to Canada other than the 
usual exempt classes of government representatives, students, 
and merchants ("defined by what regulations the Minister of 
Immigration and Colonization may prescribe") shut off immigra- 
tion; only a few hundred Chinese, all belonging to the exempt 
classes, have entered since the law became effective. 

Australia and New Zealand. 

The history of Oriental migration to Australia and New Zea- 
land is strikingly like that of Oriental migration to the United 
States and Canada. Starting about the same time, it was also 
lured by gold, and passed through a similar cycle of local con- 
flicts, restrictive measures, and national exclusion founded on a 
policy of racial selection. In the beginning Victoria, South 
Australia, and New South Wales attempted to control Chinese 
competition by poll taxes and legislative measures limiting the 
number of Chinese immigrants that could arrive on a ship. This 
checked the movement at certain points only to increase it at 
others. Gradually the different colonies learned that concerted 
action was necessary. 

Up to the last decade of the nineteenth century the action of the 


various colonies toward Chinese immigration was directed toward 
avoiding the evils which were supposed to be connected with a large 
Chinese element in the community. Between 1891 and 1901 the feel- 
ing evinced gradually developed the "White Australia" policy which 
excludes all colored people. On the consummation of federation this 
policy was expressed in the Commonwealth Immigration Act of 

The act, as amended, provides that no person shall be admitted 
who fails to write out "in the presence of the officer," and from 
his dictation "not less than fifty words in any prescribed lan- 
guage." 46 This indirect method of excluding Asiatics was first 
suggested to Australian colonial legislatures by the Imperial 
Government in 1897 in order to spare the susceptibilities of Brit- 
ish Indian subjects of the Crown as well as of foreign Asiatics. 46 

At the time of its inception the Act of 1901 met with vigorous 
protest from the Japanese Government. Although few Japanese 
had gone to Australia, Japan did not wish to see the continent 
locked against it. In response to its protests the Australian Gov- 
ernment in 1904 concluded an informal arrangement, a sort of 
Gentlemen's Agreement, "whereby bona fide students, merchants 
(engaged in oversea trade), and visitors from Japan were per- 
mitted to enter the Commonwealth for a stay of 12 months with- 
out liability to the dictation test on passports issued by the Japa- 
nese authorities and viseed by the British Consul at the port of 
embarkation." 47 Subsequently similar arrangements were made 
with the governments of India and China. 

During the early years of Oriental immigration to New Zea- 
land the procedure used to check the stream was similar to that 
of the colonies in Australia. At first head taxes and ship limita- 
tion measures were imposed. Later, alarmed by the influx of Chi- 
nese following the passage of the Australian Commonwealth Im- 
migration Act of 1901, the Government of New Zealand in 1908 
likewise introduced a dictation test. An Act passed in 1920 re- 

** Official Year Book of the Commonwealth of Australia, 1925, p. 955. 

45 Immigration Act 1901-1925, Sec. 3a. 

46 Problems of the Pacific (1927), p. 483. 

47 Phillips and Wood, op. cit., p. 84. 


pealed this measure and left it to the discretion of the Governor- 
General to determine what "nation or peoples" might be ad- 
mitted. 48 

Latin America. 

Although many of the smaller Latin- American republics have 
followed the fashion set by the Anglo-Saxons of erecting legal 
barriers against Asiatic immigration, some of the countries, 
notably Brazil and Argentina, encourage Asiatic colonization, 
especially Japanese. 

Mexico has no discriminatory legislation against Orientals as 
such, but the general requirement of the Migration Act of June 
1, 1926, that all immigrant workers must produce a contract of 
employment in conformity with Mexican law and at the same 
time possess "sufficient funds to maintain themselves . . . during 
three months," serves to restrict Asiatic immigration. 49 Organized 
labor in the United States and Mexico has unsuccessfully at- 
tempted to persuade the Mexican Government to enact exclusion 
legislation against "peoples of Oriental birth or extraction." 50 
Naturally the interest of American labor in such legislation is to 
close what it considers a back-door entrance for Orientals, al- 
though there is no evidence that Mexico has been used to any 
great extent by Orientals as a mode of surreptitious entry to the 
United States. Between 1911 and 1924 the net immigration of 
Chinese to Mexico was 10,036 and the net immigration of Japa- 
nese, 2,125. 51 According to the 1921 census there were 14,813 
foreign-born Chinese in Mexico. 52 The Japanese population in 
1927 was only 4>,530. 58 

Panama, owing perhaps to United States influence, prohibits 
by an Act of 1927 the immigration of Chinese, Japanese, East 
Indians, and certain other non-white peoples. 54 Guatemala for- 
bids the entry of Asiatics in general ; Salvador prohibits the ira- 

48 Immigration Restriction Act, 1908, Amended, November 9, 1920. 

49 Monthly Record of Migration, December, 1926, p. 501. 
so Ibid., November, 1927, pp. 435-436. 

si International Migrations, op. cit., I, 503, 504 

&2 Statesman's Year-Book, 1928, p. 1100. ^ Japan Tear Book, 1929, p. 48. 

s* Monthly Record of Migration, December, 1927, p. 470. 


migration of Chinese citizens; Nicaragua forbids the entrance 
of citizens of Asiatic races; Costa Rica likewise does not allow 
Chinese to settle in the country; Honduras is the only Central 
American republic which as yet has no discriminatory legislation 
against Orientals. 55 Colombia and Ecuador definitely exclude 
Chinese. For a time the Peruvian Government forbade the en- 
trance of Chinese immigrants, but in 1909 the restriction was 
cancelled "on condition that the Chinese authorities restrict the 
immigration themselves." 56 Chile will not receive Asiatics who 
come via Panama. The other countries of South America have 
no legislation against Orientals that does not pertain equally to 
other immigration. Asiatic immigration to South American re- 
publics, save that to Peru, Brazil, and Argentina has been 

Post-Exclusion Migration. 

Restrictive legislation has proved effective. During the four- 
year period prior to the passing of the Immigration Act of 1924 
a total of 17,226 Chinese immigrant aliens entered the United 
States, whereas during the four years following its enforcement 
only 5,078 Chinese immigrant aliens entered. The figures for the 
Japanese for the corresponding periods are 28,025 and 2,4*62. 
Moreover since the passing of the 1924 Act 4,464 more Chinese 
have departed from the United States than have entered it, and 
Japanese total departures have exceeded total entries by 
18,402. 57 An analysis of the Chinese arrivals shows how few Chi- 
nese are actually added to the United States population annually. 
Of 8,402 Chinese who applied for admission, 8,018 were ad- 
mitted of whom 4,507 were in transit, 519 temporary visitors, 
1,795 domiciled residents who were returning from visits abroad 
and 699 merchants permitted to carry on trade. And of the re- 
maining 498 Chinese who would be added to the population, 
only 14 were admitted for permanent residence, that is, "only 
those who were ministers of a recognized religious denomination 

so See Ching-ch'ao Wu, The Chinese Social and Political Science Review, XIII, 
No. 2, pp. 161-162. 

56 Ibid. 5 7 Annual Reports of the Commissioner General of Immigration. 


or professors of colleges or seminaries, together with their wives 
and minor children." 58 

Similarly in Canada, 69 there has been a decided reduction in 
Oriental immigration since restrictive legislation has gone into 
effect. During the years 1922-24 a total of 3,133 Chinese entered 
the Dominion, whereas after the 1923 Chinese Immigration Act 
became effective only two Chinese entered in the years 192527. 
For the three years prior to the Gentlemen's Agreement, 19068, 
11,565 Japanese immigrants entered Canada, whereas during the 
next three years, 190911, only 1,203 immigrants entered. Dur- 
ing 192628 Japanese entries to Canada have been about the 
same as immediately after the Agreement, a total of 1,374* having 
entered. East Indian immigration to Canada has been practically 
nil since the Kamagata Maru was refused permission to land in 
1914; between 1915 and 1928 only 309 Indians have come to 
Canada, most of whom have been students or tourists. 

The dictation test, as used in Australia, seems to have proved 
a barrier to Asiatic immigration. Only a few Asiatics have at- 
tempted to take it and up to 1929 none had passed. The fear of 
the test and its mode of administration is said to operate as a 
"stand-off signal" 60 to prospective immigrants. "During the last 
five years the number of persons who desired but were not per- 
mitted to land was 18 in 1922, 49 in 1923, 50 in 1924, 35 in 
1925, and 58 in 1926." 61 Those admitted without the dictation 
test were as follows : 

1923 1924 1925 1926 1927 

Chinese 1,974 1,917 1,235 1,780 1,767 

Filipinos 25 15 22 15 7 

From India and Ceylon 141 174 186 188 190 

Japanese 222 240 440 328 261 

The majority of the persons of Asiatic or other non-European 
nationality shown in the table are former residents of Australia who 
have returned from visits abroad or are persons who have been ad- 
mitted temporarily under exemption certificates for business, educa- 
tion, or other purposes. 62 

** Annual Report of the Commissioner General of Immigration, fiscal year end- 
ing June 30, 1929, p. 17. 

59 Canada Year Book, 1929. o Problems of the Pacific (1927), p. 485. 

i Official Year-Book of the Commonwealth of Australia, 1928, p. 899. 
62 Ibid., 1929, p. 928. 


The numbers of Asiatics arriving in New Zealand since the 
system of permits required by the Immigration Act of 1920 went 
into effect, do not indicate much change from the preceding 
years, as shown by the following table. 83 

Chinese Indians 

Arrived Departed Arrived Departed 

1917 272 313 92 12 

1918 256 214 138 19 

1919 418 238 193 18 

1920 1,477 380 225 54 

1921 255 368 137 100 

1922 345 362 32 125 

1923 365 378 115 66 

1924 548 451 128 128 

1925 517 524 216 165 

1926 613 641 239 164 

Between 1921 and 1926 only 119 Indians and 19 Chinese were 
added to the population. 

Besides reducing the volume of Oriental immigration, restric- 
tive legislation has had a selective influence. During the early 
stages of Asiatic immigration, not only to the United States but 
to other countries bordering on the Pacific, it was primarily the 
coolie who migrated, for the frontiers required his labor. His 
characteristics were taken as typical of Oriental civilization and 
all Orientals were commonly thought to belong to the same class. 
Exclusion legislation, wherever it has been applied, has practically 
eliminated this type of immigrant. As noted above the Asiatics 
now arriving in the United States under the exemptions provided 
in the 1924 Act belong almost exclusively to the upper social and 
economic classes, such as students, government officials, tourists, 
and merchants. The only Oriental coolies arriving at present are 
former residents who have been granted return permits. In this 
respect there is a fundamental difference between the Chinese 
and Japanese who enter the United States. Owing to the fact 
that two classes of Chinese United States citizens and children 
of "merchants" enter in larger numbers than do similar classes 
of Japanese (the definition of a Chinese merchant is that of the 
Chinese Exclusion Laws which were in effect prior to the Act of 
1924), a much larger percentage of Chinese than of Japanese 

es New Zealand Official Year-Book, 1928, p. 88. 


entries since 1924 has been of the coolie class. By the older laws 
Chinese engaged in local forms of business are allowed to enter 
as merchants; whereas the only Japanese merchants allowed to 
enter are those engaged in international trade as defined in the 
1924 Act. Moreover the fact that the Chinese maintain their 
families in China while the Japanese have established homes in 
the United States makes for a larger immigration of Chinese 
who assert they are United States citizens. 

By changing the character of Asiatic immigration the Act 
of 1924 is also changing its distribution within the country. The 
coolie immigrants of pre-exclusion days almost invariably found 
employment close to the Pacific ports of entry and only as they 
advanced economically and entered trade did they tend to spread 
into other districts. The exempt classes who now enter go wher- 
ever their business or professional interests call. An increasing 
proportion of post-exclusion migration goes direct to eastern 
United States. During the two years before the 1924 law went 
into effect 54.8 per cent of the Chinese who arrived gave one of 
the three Pacific Coast states as the place of future permanent 
residence, but for the four-year period (192528) since the 1924 
Immigration Act only 43.8 per cent of the Chinese entries indi- 
cated Pacific Coast states as the place of future residence. The 
corresponding percentages for the Japanese are 52.9 and 40.4. 
New York is becoming an increasingly frequent destination for 
Chinese and Japanese of the non-immigrant classes. For the two- 
year period, 1923-24, 11.1 per cent of the Chinese and 5.2 per 
cent of the Japanese who entered the country went direct to New 
York state while for the four-year period since the Immigration 
Act, 1925-28, 13.6 per cent of the Chinese and 25.8 per cent of 
the Japanese arrivals gave New York as their destination. In 
1929, of the 1,071 immigrant alien Chinese admitted, 412 gave 
California as the state of intended future permanent residence, 
56 Washington, and 14 Oregon ; and 106 gave New York state. 
Of 716 Japanese, 224 gave California, 79 Washington, 9 Ore- 
gon, and 195 New York state. 04 

* Compiled from Table 28, p. 78, Annual Report of the Commissioner General 
of Immigration, 1928, and similar reports for other years. 


This new type of Oriental immigration, more widely dis- 
tributed, is developing tolerance for itself. The merchant, pro- 
fessional, and student classes of the new immigration come into 
contact with a class of the American people which the earlier 
immigrants scarcely touched except in the role of servants or 
laborers. This, in conjunction with better trade contacts in the 
Pacific area, is tending to break down prejudice and to build up 
more cordial attitudes. The recent emergence of good-will groups, 
such as China Clubs and Japan Societies, as well as numerous 
trade and business agencies, indicates that organization is no 
longer a one-sided affair as it was during the period of agitation 
for restriction and exclusion. This does not imply a probable 
change of policy with respect to the admission of Oriental la- 
borers, but it means that more consideration is now given to the 
sensibilities of Asiatics and the nations they represent. 

Occupational Succession. 

Partial restrictive legislation, however, protects a prospering 
region only temporarily. Inasmuch as migration is largely a re- 
sponse to economic conditions the damming of one stream usually 
releases another. Exclusion of the Chinese in 1882 created a 
vacuum which was filled by immigration from Japan. Similarly 
restriction of the Japanese by the Gentlemen's Agreement of 
1907 and the Act of 1924 has been followed by a tide of Filipino 
and Mexican immigration which is now causing as much alarm 
as did the Chinese and Japanese immigration of previous years. 
Organizations formed to combat this earlier immigration are now 
actively opposing the influx from the Philippines and Mexico. 

Occupational requirements play a large role in the selection of 
immigrants. Throughout the Pacific Coast states, as well as in 
Hawaii, a considerable part of the prevailing economy requires 
a high proportion of relatively unskilled mobile labor. The gen- 
eral high standard of living and the competition for individual 
progress effect a continuous graduation process. Few individuals 
are content to remain at the base of the occupation pyramid. As 
soon as they acquire sufficient competence and skill they seek 
more desirable occupations. This frequently means a move to 



other districts. The Chinese who began as laborers in the mines 
and fields of California are now concentrating in the great cities 
throughout the country engaged for the most part in business 
and domestic service. The Japanese, who followed them, spent 
even less time as migratory unskilled laborers. They entered agri- 
culture as independent cultivators, and when thwarted by alien 
land legislation, concentrated in cities and engaged in a wide 
range of business and professional enterprises. The occupations 
thus vacated by the earlier immigrants are being filled by Mexi- 
cans and Filipinos. This racial occupancy is well illustrated by 
the employment statistics for the sugar plantations of Hawaii, 
and the fishing industry of Alaska. 




Total Workers 14,639 
Native Hawaiian and 




Part Hawaiian 






Porto Rican 

. . . 


Other Caucasian 










. . . 

. . , 


. . . 

All others 

































46 3 066 
























Number cent 

Total Workers 21&00 100.0 


















* . . 


Number cent 

S1#1S 100.0 
17,693 56.7 








Number cent 



65 Romanzo Adams, The Education and the Economic Outlook for the Boys of 
Hawaii, p. 11. 

66 Annual Reports of the Governor of Alaska. 
7 Negroes, Koreans, Porto Ricans. 





Disarmament vs. Security. 

THE discussions of the League's Preparatory Commission in- 
trusted with the preparation of a skeleton convention for the 
reduction and limitation of armaments have brought to light two 
opposing schools of thought. The "disarmament" school consists 
chiefly of the two greatest maritime Powers, one of which is cau- 
tious in committing itself to security measures, the other rejecting 
almost all share in them, and of the nation disarmed by the Peace 
Treaty ; the "security" school, led by France, includes the conti- 
nental Powers whose military systems are based on conscription, 
and, with the exception of Italy, these Powers are knit together by 
alliances with France. The well-known French thesis is that for 
want of an adequate organization of world security these alliances 
are necessary to the protection of France. Coming largely from 
geographical and historical sources, and representing divergent 
national interests, though stated in general terms, the respective 
views of these two schools of thought as to the evolution of inter- 
national relations determine the respective approaches to the spe- 
cific problem of disarmament. In this sense, as Sir George Aston 
says, "war belongs not to the province of arts and sciences, but to 
the province of social life." 1 The "security" school, speaking 
through the mouthpiece of France, insists that before nations re- 
duce or limit armaments their security must be buttressed by mili- 
tary and economic guaranties against aggression. Assuming that 
the possibility of wars causes nations to arm, it concludes that 
only the creation of political circumstances alliances, guaran- 
ties will bring about disarmament. The philosophy of this 
school was embodied in the Treaty of Mutual Guaranty and in 
the Geneva Protocol of 1924, both of which were rejected by 
Great Britain, the first by a Labor and the second by a Con- 
servative government. 

i Major General Sir George Aston, The Study of War, p. 8. 


The "disarmament" school, headed by Great Britain, applies 
the direct or technical method to disarmament. Although not 
minimizing the "security" factor, it argues that confidence in 
safety will go along with the disarming process : huge armaments 
foster the feeling of insecurity and cause wars, 2 and the solution 
must be sought in the immediate study of the technical means by 
which armaments may be reduced and limited. Both schools agree 
that the expectation of war breeds arms and that arms breed war, 
but they differ fundamentally as to where to break the procreant 

Apart from the difficulties created by this fundamental differ- 
ence of approach on the political side, the work of the Prepara- 
tory Commission has been checked by the divergent British and 
French attitudes toward the "mechanics of disarmament." These 
differences may be listed under four heads : 

1. Interdependence of armaments vs. separate limitation of mili- 
tary, naval, and air armaments. The disagreement here is 
largely as to method. 

2. Limitation of naval armaments by total tonnage vs. limitation 
by categories. 

3. Unlimited trained land "reserves" vs. limited trained land "re- 
serves." Here again the divergence relates to method. 

4. International control or supervision of armaments vs. reliance 
upon the good faith of the signatories to a general disarma- 
ment convention. 8 

The French rely upon history and logic to support their con- 
tention that land, sea, and air armaments form an indissoluble 
scheme of defense. "I think nothing is more remarkable in the long 

2 In the nineteenth century it was argued that general armament is the road 
to peace. "That the organization of military strength involves provocation to war 
is a fallacy, which the experience of each succeeding year now refutes. The im- 
mense armaments of Europe are onerous; but nevertheless, by the mutual respect 
and caution they enforce, they present a cheap alternative, certainly in misery, 
probably in money, to the frequent devastating wars which preceded the era of 
general military preparation." A. T. Mahan, Atlantic Monthly, September, 1893. 
Navy men would now limit the argument, each favoring the expansion of his own 
navy only. 

Foreign Policy Association, Information Service, November 23, 1928; also 
British White Paper [hereinafter referred to by Command Number and date 
only], Cmd. 2888, 192T, pp. 4r-9. 


struggle with France for India," writes Vice Admiral Sir H. W. 
Richmond, 4 "than the regularity with which the pendulum of suc- 
cess swung to the French or English armies on land according to 
the state of the command at sea. . . . We lose command in 1746, 
and Madras is taken by the French. They attack Cuddalore ; our 
command at sea is regained and the attack fails. French squad- 
rons, detained at Mauritius for want of supplies, prevent the 
French from assisting our enemies on land. Command at sea per- 
mits us to send Clive to Bengal and win Plassey and conquer the 
Northern Circars. A hole in the command enables Lally to be rein- 
forced by sea and take Fort St. David ; but an attempt at Madras 
is prevented by the arrival of a British squadron. The French 
squadron is fought and beaten, Masulipatam is taken ; the victory 
of Wandewash and the fall of Pondicherry follow . . . " 

France, Italy, and most of the other continental Powers assert 
that land, sea, and air armaments, because of their interrelation in 
all schemes of military preparation, cannot be attacked separately 
in plans for the limitation of armament. France refused President 
Coolidge's invitation to the 1927 Naval Conference on the ground, 
inter alia, that "the limitation of naval armaments cannot be un- 
dertaken without taking into consideration the manner in which 
the problems of limitation of land and air armaments are pro- 
posed to be met." Italy likewise turned down the invitation be- 
cause "there exists an undeniable interdependence of every type 
of armament of every single Power. ..." That the French still 
cling to the essential interdependence of efforts for armaments 
limitation was manifest in M. Briand's note of acceptance of the 
British invitation to the London Naval Conference of January, 
1930. "The principles which have always guided French foreign 
policy," he writes, "both with regard to the general conditions of 
the problem of limitation of armaments and on the subject of the 
special conditions of the problem of the limitation of naval arma- 
ments, have too often been defended, both during the work at 
Geneva and in other negotiations, to need any repetition." In the 
French view the naval discussions in London can only be a prelude 
to what must finally be done at Geneva where armaments must be 

* National Policy and Naval Strength, pp. 34,1-342. 


considered in their interdependent relation. French consent to 
limit its potential sea power must depend upon the relative posi- 
tion which the disarmament conference at Geneva now under 
preparation will allow it to maintain in the land and air services. 
Downing Street assured the French Government that the work to 
be done at the London Conference would form but a preliminary 
step to the work contemplated at Geneva. 6 

To the United States and Great Britain, on the other hand, the 
French contention seems a studied complication of the issues de- 
vised to defeat any clear-cut decision. The two nations which rely 
almost wholly on their navies for defense argue that the various 
classes of armaments can and should be limited separately. 6 They 
feel that attempts to solve armaments in their interdependent rela- 
tion not only complicate the already difficult task but stand in the 
way of any progress. The thought of this school gave birth to the 
Lord Esher scheme which was destined to fail because it was too 
exclusively directed toward the limitation of land forces to the 
neglect of sea armaments. 7 

Naval Limitation. 

Hitherto any discussion about the limitation of naval arma- 
ments has produced a divergence of opinion as to whether limita- 
tion should be by global tonnage or by categories, i.e., classes of 
fighting ships. 8 The French group has always contended that 
naval limitation must be by round tonnage which every nation 
should be free to distribute in accordance with its needs. The 
smaller naval Powers wish to be unrestricted in the construction of 
"cheap 55 ships which, like fortresses, can protect their homelands 
against even the largest fleets. A balanced fleet based on the 
Washington ratios is the ideal of the British Admiralty and the 

c New York Times, October 8, 1929; The Spectator, December 21, 1929. 

o A change by the British on this point, if they come to realize their vulnera- 
bility to air attack from Continental Europe, is not impossible. Such a realization 
might even swing them from the "disarmament" school to that of "security." 

7 See Survey, 1928, p. 504. 

8 The classes of fighting ships comprise battleships and battle cruisers (i.e., 
"capital ships"), cruisers, aircraft carriers, destroyers, torpedo boats, submarines, 
and sloops, mine sweepers and river gunboats classed with other auxiliaries as ex- 
empt vessels. 


United States Navy Board; a similar balance within the respec- 
tive 1.75 ratios of France and Italy would mean inferiority for 
them in every class. The Italian Government, an adherent of the 
global tonnage school, has declared that 

the states with greater financial resources have, in effect, in limita- 
tion by categories the means of creating and maintaining an absolute 
superiority in each of the different type of ships over those states 
with smaller financial resources. Whereas global tonnage, by leaving 
each state free to adopt and choose those types which best respond 
to the exigencies of its own safety, allows the less fully armed states 
to find in such choice and adoption a certain compensation for the 
superiority of the others. 9 

The United States and Great Britain, with Japan generally in 
agreement, take the opposite view, i.e., that naval armaments 
should be limited by categories or classes of ships. With far-flung 
possessions and large floating commerce, their contentions are 
similar: the strategy of the British Admiralty presupposes the 
seven seas as its arena of combat; American naval strategy con- 
cerns itself, in the main, with the protection of overseas commerce 
and shipping, the safeguarding of the Atlantic and Pacific 
coasts, the defense of the Panama Canal, and the protection of the 
Philippines ; the crucial task of the Japanese navy is to keep open 
communications with the sources of food and raw materials for 
Japan and the markets on the Asiatic mainland. Loss of command 
of the China seas would be as serious for Japan as control of the 
Channel and the North Sea by an enemy would be for England, 
for nearly one-third of Japan's foreign trade now passes over the 
short haul in the China and Yellow seas, 10 and the potential de- 
velopment of mainland resources is still large. 

The American and British delegations have attempted to link 
to the universal interest their own respective strategic needs for a 
strict and detailed definition of categories. Great Britain has de- 
clared at Geneva that while there must be some elasticity for the 
smaller navies, to allow France and Italy freedom in distribution 

Note verbale communicated by the Italian Government to His (Britannic) 
Majesty's Representative at Rome, October 6, 1928; Cmd. 3211, 1928. 
10 From Formosa, China (especially Manchuria), Korea, and Siberia. 


of their naval tonnage would produce the risk that one or both of 
them might concentrate all its tonnage in one particularly danger- 
ous category such as submarines, while the United States has as- 
serted at Geneva that the French thesis 11 contains the germ of 
eventual competition which would not lessen international suspi- 
cion, uneasiness, or mistrust. 

Trained Land Reserves. 

Over trained land reserves the two schools have come to an im- 
passe. The French, supported by every state whose military sys- 
tem is based on universal compulsory military service, refuse to 
listen to any limitation which would impair the universality of the 
system, or undermine the means for amassing trained man power 
that can be effectively used in time of need. 12 Conscription, though 
a relatively new method of raising an army, is deeply embedded in 
the national life of its protagonists. 13 

The maintenance of conscript armies in time of peace has an 
entirely different meaning for the people of the United States and 
Great Britain ; to them trained reserves carry the same dangers 
as standing armies, and their aversion to standing armies dates 
from the reign of King John. The alienigeni milites and servientes 
stipendarii are condemned in Magna Carta as having been 
brought to England "for the injury of the realm," and long- 
standing constitutional limitations surround the Parliamentary 
grants to the British army ; and the experience of the American 

11 The French draft convention submitted to the Preparatory Commission in 
March, 1927, contains the following article: "Each of the High Contracting Parties 
shall be free to distribute and allocate its total tonnage as may be best for the 
purposes of security and defense of its national interests." Cmd. 2888, 1927. 

12 Statistics in the Armaments Year-Book, 1928-29, point to a considerable pre- 
ponderance of military force in the hands of France and its continental allies. 
While the German army is limited to 100,000, the army of France contains 617,533 
men, of Poland, 253,824, of Italy, 251,270, of Czechoslovakia, 127,012, and of Yugo- 
slavia, 107,541. 

is "In France," says Salvador de Madariaga (Disarmament, p. 36), "soldiering 
for a couple of years in one's youth is considered as one of the duties of the citi- 
zen. The dogma of equality is as sacred to the Frenchman as that of the immacu- 
late conception to the Catholic." The dislike of large standing armies takes the 
form in Switzerland, the most democratic and peaceful of all the members of the 
unruly family of nations, of a preference for the universal military training of 
youth. Neither people would admit that the "reserves" which this system produces 
can be discussed without reference to the social and historical background. 


colonies with standing armies, in part mercenary, led Madison to 
declare during the debates on the Federal Constitution that a 
"standing army is one of the greatest mischiefs that can possibly 
happen." Citing the German military machine of the pre-war 
days, these two nations have expressed at Geneva the view that 
compulsory military or naval service in time of peace impregnates 
youth with a war psychology. At the same time, unless the con- 
scription system is to be challenged altogether, and the British 
have shown no intention or desire to go so far as that, the limita- 
tions that might be imposed on it are not very considerable. If all 
the youth of a nation have to do military service in time of peace 
they will always remain trained reserves. Any limitations would 
naturally be confined to the preparation of the class which passes 
into the conscription machine and the period of service which each 
man spends in it. 

Method of Control. 

On the matter of international supervision and control of arma- 
ments, the discussions of the Preparatory Commission have 
brought forth far-reaching statements of national policy reveal- 
ing, as on most other vital matters dealt with by the Commission, 
two schools of thought. How and by what means shall the execu- 
tion of a disarmament agreement be controlled? The French, close 
to their war experience, take the view that an international com- 
mission must be intrusted with the general execution and supervi- 
sion of a disarmament convention ; such a convention can easily be 
overreached on the suspicion, whether genuinely entertained or 
not, that some other nation is not keeping faith. The United 
States, supported by Italy, holds that international engagements 
rest on mutual confidence and their fulfilment should not be su- 
pervised or in any way controlled; aversion to anything that 
savors of supergovernment is involved. To require each nation to 
publish the steps taken in the fulfilment of its disarmament obliga- 
tions has been proposed as a solution of this controversy. 

Such are the discordances which the divergent courses of the 
different social traditions add to the difficulties inherent in dis- 
armament conferences. Although no tangible accomplishments 


may be credited to the account of the Preparatory Commission, 
its work has nevertheless been of substantial value. The attitudes 
of the states toward disarmament, the sharp conflicts of principle 
presented, previously unknown or obscure, are now disclosed and 
at every point submitted to critical challenge and the new test of 
international validity. This in itself marks a new stage in interna- 


THE absence of Russia from the international council table has 
been an impediment to any scheme for disarmament. Russia's 
neighbors argued that any curtailment of strength which they 
might impose upon themselves would subject them to a greater 
feeling of insecurity in the face of so large a standing army 
562,000 men 14 possessed by a nation that was neither a member 
of the League nor committed to any reduction in the size of its 
armaments. Russia had therefore to be included in any scheme for 
disarmament which the League was struggling to work out. Ac- 
cordingly, the Union of Soviet Socialist Republics was invited to 
the Fourth Session of the Preparatory Commission. M. Litvinoff , 
head of the Soviet delegation, took the Commission by surprise 
when he announced that his Government had authorized him to 
place before the Commission a proposal which was accompanied by 
a resolution demanding the immediate working out of a draft con- 
vention embodying the following principles : 

1. Dissolution of all land, sea, and air forces. 

2. Destruction of all weapons, military supplies, and means of 
chemical warfare. 

3. Scrapping of all warships. 

4. Discontinuance of any force of compulsory military training. 

5. Abrogation of all laws concerning military service, whether 
compulsory, voluntary, or by recruiting. 

6. Destruction of fortresses and naval air bases. 

7. Scrapping of war industry plants. 

8. Abolition of military, naval, and air ministries. 

9. Dissolution of general staffs, legislative prohibition of military 

14 League of Nations, Armaments Year-Book, 1928-29. 


propaganda, and legislation making violation of any of these 
proposals a crime against the state. 16 

In short, the Russian delegation proposed that all the nations 
abolish everything from battleships to military textbooks. The 
plan amazed by its range ; it achieved the ultimate goal of all the 
discussions by the shortest possible route. The bourgeois states- 
men had to answer. 

On the agenda of the Fifth Session of the Preparatory Commis- 
sion the main business was accordingly the examination of the 
proposals submitted by the delegation of the Union of Soviet So- 
cialist Republics. M. Litvinoff set the pitch and tempo of the de- 
bate with the theme that only the fulfilment of the Convention for 
Immediate, Complete and General Disarmament proposed by his 
government would bring general security and peace. He attacked 
the labors and negligible accomplishments of the Commission and 
the League by pointing out that 

of the thirty-eight sessions which occupied themselves with the ques- 
tion of disarmament, no fewer than fourteen commissions and other 
League organs devoted over a hundred and twenty sessions not sit- 
tings, mark you, but sessions to this question of disarmament, on 
which one hundred and eleven resolutions have been passed by general 
Assemblies of the League and the Council of the League alone. Turn- 
ing to the results of this vast quantity of work, the documentation of 
which has taken reams of paper, we are forced to the conclusion that 
not a single step of real importance has been taken towards the 
realization of disarmament. 16 

The two main questions underlying the Russian proposals were 
stated by M. Litvinoff to be : 

1. Does the Commission agree to base its further labours on the 
principle of complete and general disarmament during the periods 
proposed by us? and 

2. Is it prepared so to carry out the first stage of disarmament 
as to make the conduct of war, if not an absolute impossibility, of ex- 
treme difficulty in a year's time? 

With the exception of the German and Turkish delegations, the 

is League of Nations, C. 165. M. 50, 1928, IX, 325 ff. 16 Ibid., p. 240. 


members of the Commission stood as one man against the Russian 
proposals. Lord Cushendun, chief of the British delegation, un- 
dertook to answer the charges brought by M. Litvinoff against 
the Commission as well as to give an exhaustive analysis of the 
proposals for complete and general disarmament. He launched his 
attack by asking in what spirit the Soviet Government sent a rep- 
resentative to take part in the Commission's proceedings, citing 
an article published in Izvestia the official organ of the Soviet 
Government which spoke of Russian participation as nothing 
but an attempt to unmask the capitalist states and "to disclose the 
sabotage of the Soviet proposals for disarmament." Lord Cushen- 
dun openly accused the Russians of coming to Geneva not to give 
any genuine assistance in the work of disarmament, but from an 
ulterior motive, intimating in no uncertain terms that that motive 
was to remove obstacles in the way of a world revolution in the 
capitalist states. 

In introducing his disarmament scheme, M. Litvinoff asked for 
special support from the United States which was then publicly 
making a proposal for the renunciation of war as an instrument 
of national policy. "Since armed forces have no other raison d'etre 
but the conduct of war, and since the prohibition of war would 
make them quite superfluous," contended M. Litvinoff, "it would 
appear that consistency and logic must dictate to the Government 
concerned the support of our proposal." Mr. Gibson, showing less 
vehemence than Lord Cushendun, replied that it was precisely on 
the grounds of sincerity, consistency, and logic that his Govern- 
ment supported the idea of a multilateral pact renouncing war as 
an instrument of policy. The United States could not support the 
drastic proposals for complete and immediate disarmament which 
it did not believe were calculated to achieve their avowed purpose. 
"Any other attitude on the part of my Government," said Mr. 
Gibson, "would be lacking in sincerity, consistency and logic, for 
my Government believes in one project and disbelieves in an- 
other." 17 Neither the British nor the American speaker undertook 
to explain definitely the logical connection he saw between the 
Russian proposals and Russian insincerity. 

IT League of Nations, C. 165. M. 50, 1928, IX, 258. 


Other delegates pointed out in a more factual vein the futility of 
suggesting complete disarmament in a world that is so little ready 
to accept it. They declared that the Russian principle ran counter 
to the Covenant of the League, that the Commission can do fruit- 
ful work only by accepting as its basis the principle of the reduc- 
tion of armaments, and that progress toward reduction is inti- 
mately tied up with the feeling of security which must precede 

Foreseeing the fate of his first draft for complete disarmament 
and taking his cue from the progress of the debate, M. Litvinoff 
brought in a second draft by which he sought to effect a partial 
and graduated reduction of armaments based on the principles 
declared by the speakers to underlie the work of the Preparatory 
Commission. In this draft 18 states are divided into four groups ac- 
cording to the size of their military armaments. States in the first 
group are to reduce their armed forces by one-third ; those in the 
second group by one-third; those in the third group by one- 
fourth; those in the fourth are the states whose armaments are 
already limited by the peace treaties and no provisions are there- 
fore made for them. The same principle is applied to naval arma- 
ments, with a division of the states into two groups. Air and 
chemical armaments are prohibited. Defense budgets are to be re- 
duced in proportion to the reduction of land, air, and naval 
forces. A permanent commission of international control consist- 
ing of an equal number of legislative and trade-union representa- 
tives is set up to supervise the execution of the convention. 

A comparison of the two Russian proposals reveals that the sec- 
ond is infinitely more practical than the first. It has the merits of 
Lord Esher's plan and none of its defects. It recognizes the theory 
of interdependence of armaments, carrying out reduction on pro- 
portional principles modified to favor less protected and smaller 
states. It establishes a coefficient for that proportional reduction. 19 
This proposal, less visionary and more conciliatory than the first, 
received no such critical attention; certainly a challenge on the 
ground of ulterior motive would have been more difficult. But it 

is Ibid., p. 34,7. 19 Ibid., C. 195. M. 74, 1929, IX, 23. 


used the principle of proportionality, taking as a basis the size of 
armaments as they exist at present, or the status quo, without 
taking into consideration the geographical situation and special 
circumstances of each country. The political factors had the up- 
per hand, and the Russian draft proposals met a sudden death. 
Armament is frequently an instrument of policy in the struggle 
for relative power and so may disarmament be, and Lord Cushen- 
dun derided the Soviet proposal as an attempt to accomplish the 
Soviet purpose while maintaining Russian hostility to the family 
of nations. 


The Nature of the Bargain. 

The Anglo-French naval understanding of 1928 arose out of a 
sharp conflict of principle over the limitation of naval armaments 
which was revealed in the draft conventions submitted to the Pre- 
paratory Commission by Great Britain and France respectively ; 20 
one of those conflicts, as we have noted, which has brought the 
work of the Commission to a standstill. To grasp the "under- 
standing," it is necessary to examine the precise nature of the con- 

The draft convention submitted to the Commission by Great 
Britain in March, 1927, advocated the retention of the principle 
put forth at the Washington Naval Conference of 1921-22, 
namely, the limitation of ships by categories, as well as the limita- 
tion of the number of ships in the class and the caliber of guns 
carried. Not to be outdone by the British, M. Paul-Boncour, the 
French representative, circulated an alternative draft to the mem- 
bers of the Commission based on limitation by global tonnage to- 
tal : within that total each nation was left free to build as many or 
as few of any class of warship it pleased, subject to the preser- 
vation of the treaty obligations entered into at Washington with 
regard to battleships, aircraft carriers, and cruisers. The United 
States and Japan supported the British draft ; Italy, with several 
other Powers, the French draft. 

20 Cmd. 2888, 1927, pp. 10, 18. 


The French proposal, permitting a nation to concentrate its 
allotted tonnage on some particular class of warship, such as com- 
merce destroyers, threatened the complete supremacy of the 
larger naval Powers, Great Britain especially. Unless they could 
be the stronger in all branches, circumstances might make them 
the weaker at a given place or moment. The British delegate 
pointed out that such a system of limitation enabled one nation to 
obtain an unforeseen advantage over a rival, or start a limited 
competition in naval armaments. Recognizing the reasonableness 
of this argument, the French delegate suggested a compromise 
proposal to the effect that each nation should state at the outset of 
the period governed by the treaty the amount of tonnage it in- 
tended to allot to each class of warship. The plan even as modified 
was still felt to be unsound, for the first proposal would lead to 
open competition and the modified proposal to agreed competi- 

While the Commission was struggling to effect a compromise, 
important conversations 21 were taking place between Sir Austen 
Chamberlain and M. Briand 22 and their respective naval experts 
with a view to accommodating military and naval oppositions. 

Public opinion realized that concessions were necessary from all 
parties for a general settlement to be reached, and if he [Sir Austen] 
could point to a concession by the French in naval matters, it would 
probably acquiesce in his yielding a point on the military side. On 
the other hand, we [the British] could not abandon the British 
standpoint on the question of army reserves unless we could justify 
this concession made to us in the naval sphere. 23 

21 Count Clauzel, the French delegate to the League's Preparatory Commission, 
announced on March 22, 1928, at one of the public sessions of the Commission that 
the military and naval experts have entered into useful "conversations dealing 
with the treatment of some of these delicate questions to which I have alluded and 
for which only partial solutions have been found. , . . We are far advanced along 
the path and there is no occasion to anticipate any very long delay before we 
arrive at appreciable results." Mr. Hugh Gibson, the American delegate, who had 
been encouraging direct negotiations between the various governments, was pres- 
ent when the French delegate divulged that conversations were taking place be- 
tween the British and French experts. The assertion on the part of some American 
newspapers that the United States Government was not apprised of the matter is 

22 Cmd. 3211, 1928, pp. 17, 22-24. 23 ibid., p. 17. 


The British Foreign Secretary placed before M. Briand a draft 
drawn up by the Admiralty which proposed that limitation should 
be effected by classes as follows : 

1. Capital ships ; 

2. Aircraft carriers ; 

3. Cruisers between 10,000 and 7,000 tons ; 

4. Surface vessels under 7,000 tons ; 

5. Submarines ; and 

6. Small vessels exempt from limitations. 

By this proposal, states would be allowed to transfer tonnage 
from a higher category into a lower category in all classes, excluding 
1 and 2, subject to a limitation of the proportionate total tonnage 
which might be utilized for submarines ; states with a total tonnage, 
including class 6, not exceeding 80,000 tons to be subject to no classi- 
fication. 24 

With these proposals as a basis, the conversations between the 
British and French governments proceeded. Although the other 
naval Powers were not apprised of the exact nature of the "deli- 
cate questions" which were forming the subject matter, they were 
nevertheless informed by Count Clauzel and Lord Cushendun at a 
public sitting of the Preparatory Commission that conversations 
were taking place. 

On July 30, 1928, in reply to a question as to what had been 
going on in the Preparatory Commission, Sir Austen Chamber- 
lain announced in the House of Commons that the conversations 
which had been proceeding between Great Britain and France had 
been successful, adding, 

I am about to communicate to the other principal naval Powers 
the compromise at which we have arrived, with the hope that it may 
be acceptable to them also, and that thus a great obstacle to prog- 
ress will have been removed and a step made in advance. ... I 
imagine the first serious discussion on them will probably take place 
in the Disarmament Commission itself. 25 

The prediction fell wide of the mark, for the French press im- 
mediately began an intensive campaign of interpretation. The un- 

24Cmd. 3211, 1928, p. 17. 

25 London Times, July 81, 1928; Cmd. 3211, 1928, pp. 28-29. 


derstanding was represented in Paris as the formation of another 
entente cordiale, more comprehensive in its nature than the pre- 
war Entente. Jules Sauerwein, foreign editor of the Paris Matin, 
commenting on the announcement in the House of Commons, 
wrote : 

Probably no note of agreement was ever written, and it was cer- 
tainly best that it should not be. One can make a treaty or a con- 
tract, but an entente of this kind is best preserved in spirit and fact 
by the word to each other of two men who see a common interest. 20 

The world was aware that the diplomatic experience of ten years 
prior to the World War had brought home to both nations the 
realization that their political geography demands a modus vi- 
vendi; not one that must take the form of a document called an 
Anglo-French Treaty, but rather of a spirit that presupposes 
that an Anglo-French entente is a "discovery," the discovery by 
two countries that in spite of their national differences it is to 
their common benefit to consult and to cooperate for the protec- 
tion of their essential interests at home and abroad. The economic 
facts are as inescapable as the geographical. One-third of Brit- 
ain's trade is carried on with Europe, and a good deal of this over 
the water separating England and France; moreover the Em- 
pire's communications lie along French paths. The Mediterra- 
nean controls the approaches to Egypt, India, and the Far East ; 
and as long as Great Britain prizes access to the Mediterranean 
and control of the Suez Canal as vital arteries in its imperial sys- 
tem, it can ill afford to jeopardize even the tacit cooperation of 

No longer would the British Admiralty need to fear the invasion 
of London by French cruisers, submarines, or airplanes. The two 
fleets from now on were to be "associated" a term which the 
Temps borrowed from the Wilsonian era in common action. No 
longer was England to object to the French thesis about "land 
effectives" ; France was to be given a free hand in the continued 
occupation of the Rhineland. 

Since the world was allowed to speculate, it naturally exagger- 

20 Quoted by J. T. Gerould in Current History, November, 1928, p. 306. 


ated; yet official silence persisted. And when, on August 30, in 
order to dispel the rumors which had been multiplying for a 
month, Lord Cushendun and the French Minister of Marine gave 
interviews to the press, their statements were more remarkable for 
what they denied than for what they revealed. Lord Cushendun 
denied that the agreement contained secret clauses or any ar- 
rangement as to an alliance or cooperation of the navies, or any 
agreed policy between the British and the French; furthermore, 
he stated that the arrangement arrived at with France was "no 
agreement in the ordinary sense," but of "a kind for which diplo- 
macy as yet has no verbal description." The post-war world had 
become familiar with such a diplomacy through the revelations 27 
of the circumstances surrounding the Anglo-French Entente of 
1904*; the same indefiniteness implied by Lord Cushendun had 
characterized the "conversations" 28 as Sir Edward Grey euphe- 
mistically termed them which were clandestinely carried on by 
the French and British military and naval strategists under the 
aegis of their entente. For this reason Lord Cushendun's assur- 
ances sounded more than unconvincing; they were positively dis- 

The foreign offices of Washington, Rome, and Berlin mani- 
fested considerable apprehension as to the scope and purpose of 
the accord. Official Washington feared that the understanding 
had taken a form favorable to the type of cruiser which would 
strengthen the British navy and weaken its own. Italy, insisting 
on an army and navy equal to any other on the Continent, feared 
lest its demand for equality with France had gone by the board. 
Germany feared lest Great Britain had paid for sea concessions 
the price of withdrawing objections to limitations on the system 
of training reserves. The secretive nature of its making was criti- 
cized equally with the compromise itself. 

The text of the agreement, which leaked out 29 a month before 
its publication and was officially made public on October 22, con- 
tained the following short but important articles : 

27 See S. B. Fay, Origins of the World War, I, 92. 

28 Sir Edward Grey, Twenty-five Years, I, 76. 
29j\'ew York American, September 21, 1928. 


Limitations which the Disarmament Conference will have to deter- 
mine will deal with four classes of warships : 

1. Capital ships, i.e. ships of over 10,000 tons or with guns of 
more than 8-inch calibre. 

2. Aircraft carriers of over 10,000 tons. 

3. Surface vessels of or below 10,000 tons armed with guns of 
more than 7-inch and up to 8-inch calibre. 

4. Ocean-going submarines, i.e. over 600 tons. 

The Washington Treaty regulates limitations in classes 1 and 2, 
and the Disarmament Conference will only have to consider the 
method of extending these limitations to Powers non-signatory to 
this treaty. As regards classes 3 and 4, the final Disarmament Con- 
ference will fix a maximum tonnage applicable to all Powers which no 
Power will be allowed to exceed for the total of vessels in each of 
these respective categories during the period covered by the conven- 
tion. Within this maximum limit each Power will at the final confer- 
ence indicate for each of these categories the tonnage they propose 
to reach and which they undertake not to exceed during the period 
covered by the convention. 80 

As between Great Britain and France the essence of the pro- 
posal was that (a) the French Government surrendered its con- 
tention for limitation by global tonnage in favor of the Anglo- 
American contention for limitation by categories of classes; (b) 
by negotiating in regard to naval armaments alone, France aban- 
doned the theory it had stoutly maintained at Geneva that naval, 
land, and air armaments were interdependent and must be dealt 
with as one problem. These French surrenders of position, run- 
ning merely to the "mechanics" of disarmament, are less impor- 
tant than the agreement on policy. 

The limitation of only such surface vessels as are restricted in 
class 3 of the agreement, that is, cruisers of or below 10,000 tons 
armed with guns of more than 6-inch and up to 8-inch caliber, is, 
in essence, another way of stating that only larger cruisers those 
above 7,500 tons and armed with 8-inch guns should be limited. 
The naval experts who delimited the figures were aware that 
cruisers of 7 5 500 tons and below usually mounted 6-inch guns, 
while vessels above 7,500 tons and below 10,000 tons usually 

so Cmd. 3211, 1928, pp. 26-27. 


mounted guns of more than 6-inch and as high as 8-inch caliber. 
The British Government thus had French support for a policy 
which it failed to realize at the Three Power Naval Conference at 
Geneva, namely, dividing cruisers into two classes, placing no 
restriction on the type peculiarly suited to its needs, and impos- 
ing a restriction on the type demanded by United States naval 

Class 4 of the accord gave something to France, namely, an 
unlimited hand in building submarines of 600 tons or under, while 
submarines over 600 tons, i.e., ocean-going submarines, were to be 
limited. This division rests on the French assumption that sub- 
marines of 600 tons or under are defensive weapons, whereas those 
over 600 tons are offensive. 31 The consensus of opinion among 
most naval strategists is that, aside from the difference in cruising 
radius, the smaller submarines are formidable combatants and as 
destructive as the larger. Both carry the same torpedoes and both 
can be mounted with guns of 5-inch caliber. 

The correspondence leading to the naval understanding re- 
vealed the interesting and far-reaching request of the French 
Government to which the British Government acceded that the 
same maximum tonnage for submarines and cruisers be fixed for 
all the great naval Powers. The French advanced the reason that 
such a system would avoid the possibility of engaging in delicate 
discussions concerning the relative needs and importance of dif- 
ferent navies. 82 By acceding to this request, all the great naval 
Powers Great Britain, United States, Japan, France, and Italy 
would have equality in cruisers and submarines, and thus the 
"arrangement," the French Government contended, 

would have the effect of avoiding at Geneva awkward discussions 
more likely to increase the existing mistrust between the Powers than 
to create the atmosphere of mutual confidence essential to a general 
limitation of armaments. 

But this equality is only theoretical, a sort of make-believe, for 
the compromise provided that the disarmament conference 

si Most of the German submarines used in the War were under 600 tons each. 
32Cmd. 8211, 1928, p. 25. 


would record, below the theoretical maximum tonnage allowed, the 
actual figures which in practice the High Contracting Parties would 
undertake not to exceed for the duration of the Convention. 38 

The Understanding as to Land Forces. 

No mention concerning the limitation of land forces was made 
in the agreement, and in this respect the British Foreign Secre- 
tary was correct when, replying to a question in the House of 
Commons as to whether the compromise dealt with purely naval 
matters, he said : 

Yes. The proposals I want to communicate are dealing with the 
disagreements that arise, in which, of course, we take a particular 
interest. . . . Naval questions are the ones that interest us most, and 
it is upon them that we have been seeking to reconcile our differences, 
and this is the method of making progress. 

But there was an understanding with the French Government 
an understanding which the Foreign Secretary failed to reveal in 
his House of Commons declaration made before the text of the 
naval agreement was actually drawn up that if the French Gov- 
ernment could meet the British Government's views on naval limi- 
tation the latter would be prepared to withdraw its opposition to 
the French contention that "trained reserves" be left out of the 
reckoning. The reasons for the bargain are well set forth in a 
telegram sent to the British Embassy in Washington : 

His Majesty's Government have reluctantly reached the conclu- 
sions that it will be impossible to move the French and the majority 
of other European Governments from the attitude which they have 
consistently adopted on this question and that, in present condition, 
no further progress in regard to land disarmament will be possible 
as long as this stumbling-block remains in the way. They do not, 
therefore, propose to offer any further resistance to the French con- 
tention at the present time. It is not believed that any American in- 
terest can be prejudiced by the withdrawal of his Majesty's Govern- 
ment's opposition on the military reservist question. Any agreement 
on land disarmament, even if it is in our view not entirely satisfac- 
tory in the matter of military reservists, would represent an impor- 

33 Ibid. 


tant stage in the general progress of disarmament and would be far 
better than no agreement at all. . . . 

This quid pro quo formed the basis of the entire Anglo-French 
project. The division of partnership functions between the largest 
military Power and the largest naval Power would have estab- 
lished French military hegemony on the continent of Europe, and, 
relieving the Conservative statesman's mind of the burden of con- 
tinental complexities, would have left Great Britain free to con- 
centrate its attention upon imperial problems. In some such way 
must British participation in such an understanding at such a 
juncture be explained. 


That the British Foreign Secretary had considered proceeding 
without taking the position of the United States into account is 
revealed not only by the character of the negotiations but still 
more so by the pointed way in which the French Government called 
this matter to his attention. "Temperamentally Sir Austen Cham- 
berlain apparently preferred conversations with M. Briand to 
negotiations with the authorities in Washington." 34 In a note of 
July 20, 1928, M. Briand stated that 

it will not have escaped the notice of the British Government that the 
agreement so earnestly desired on all sides can only bear fruit if the 
United States Government, in particular, agree to accept it. M. 
Briand will be glad to know whether his Majesty's Government con- 
sider it advisable to take the necessary steps to this end at Wash- 

Accordingly, on July 30, 1928, the British Government in- 
structed its representatives at Washington, Tokyo, and Rome to 
communicate to the respective governments to which they were 
accredited the terms of the compromise. Preliminary to recording 
the effect produced by this Anglo-French understanding on 
opinion elsewhere it is important to note that M. Briand, eleven 
times Premier of France, has been Minister of Foreign Affairs in 
twelve governments; he represents French opinion on foreign 

8* Allen W. Dulles in Foreign Affairs, January, 1929. 


policy with a fidelity which can rarely be paralleled by any Brit- 
ish minister. Sir Austen, on the other hand, was the spokesman for 
conservative ideas of a Conservative government, and both the 
wisdom and representative character of his policy in this particu- 
lar matter were attacked with the utmost vehemence in the press 
and at the polls, not only by the opposition parties but also by 
many of those non-partisan publicists whose opinions mold or 
reflect the vote that carries elections. Thus was the line of cleavage 
between France and Great Britain more sharply defined. 


The United States Government promptly rejected the propos- 
als and stated that "no useful purpose would be served" by ac- 
cepting the Franco-British proposals as a basis of discussion. The 
agreement, placing no limitation whatsoever on 6-inch gun cruis- 
ers or destroyers, or submarines of 600 tons or less, imposed 
restrictions only on those types "peculiarly suited to the needs 
of the United States," i.e., cruisers of or below 10,000 tons 
armed with guns of more than 6-inch and up to 8-inch caliber. 
Such a limitation the American note declared would add enor- 
mously to the comparative offensive power of a nation possessing 
a large merchant marine on which preparation may be made in 
times of peace for mounting 6-inch guns. A significant passage 

At the Three Power Conference at Geneva in 1927 85 the British 
delegation proposed that cruisers be thus divided into two classes: 
Those carrying 8-inch guns, and those carrying guns of 6 inches or 
less in calibre. They proposed, further, that 8-inch gun cruisers be 
limited to a small number or to a small tonnage limitation, and that 
the smaller class of cruisers carrying 6-inch guns or less be permitted 
a much larger total tonnage, or, what amounts to the same thing, to 
a very large number of cruisers of this class. The limitation proposed 
by the British delegation on this smaller class of cruisers was so high 
that the American delegation considered it in effect no limitation at 
all. The same proposal is now presented in a new and even more ob- 
jectionable form, which still limits large cruisers, which are suitable 

ss See Survey, 1928. 


to American needs, but frankly placed no limitation whatever on 
cruisers carrying guns of 6 inches or less in calibre. This proposal 
is obviously incompatible with the American position at the Three 
Power Conference. It is even more unacceptable than the proposal 
put forward by the British delegation at that conference, not only 
because it puts the United States at a decided disadvantage, but also 
because it discards altogether the principle of limitation as applied 
to important types of vessels. 86 

With respect to submarine tonnage the United States declared 
its unwillingness to accept as a distinct class of submarines those 
of over 600 tons, leaving all submarines of 600 tons or under un- 
limited. The latter were declared formidable combatant vessels, 
carrying the same torpedoes as are carried by larger submarines 
and of equal destructive force within the radius of their operation, 
and capable also of being armed with guns of 5-inch caliber. In 
this connection the reply read : 

The United States would gladly, in conjunction with all the na- 
tions of the world, abolish the submarine altogether. If, however, sub- 
marines must be continued as instruments of naval warfare, it is the 
belief of the American Government that they should be limited to a 
reasonable tonnage or number. 

The general objections which the United States made to the 
Anglo-French proposal were that limitation upon construction of 
certain types of war vessels did not stop competition in other 
types. The Washington Naval Conference was referred to as bear- 
ing out the American contention. Had that conference accepted 
Mr. Hughes's original plan which contemplated the limitation of 
cruisers and submarines as well as capital ships, the resulting re- 
crudescence of naval competition would have been avoided. 37 The 
United States looked upon the new proposals as tending to defeat 
the primary objective of any disarmament conference for the re- 
duction or the limitation of armament in that it would not elimi- 

86Cmd. 3211, 1928, pp. 85-36. 

87 Japan seems to have forced the pace in naval expansion in the early post- 
Washington Conference period with France close on its heels. In 1922-23, Japan 
laid down six cruisers, fifteen destroyers, and eleven submarines; France, three 
cruisers, eighteen destroyers, and eleven submarines; Great Britain, one cruiser; 
Italy, four destroyers; the United States, no ships whatever. 


nate competition or effect the desired economy. If Great Britain 
and France desired to enter into an agreement which they thought 
would be to their advantage and in the interest of limitation of 
armament, the United States declared that they were at perfect 
liberty to do so; but naturally such an agreement could not be 
applied to the United States without its consent. The United 
States' reply, however, left the door open for further negotiation. 
It suggested a basis of limitation which would permit a nation to 
vary the percentage of tonnage in classes within the total tonnage. 
The agreed percentage could be varied so that "if there was an 
increase in one class of vessels it should be deducted from the ton- 
nage to be used in other classes." 

President Coolidge in his Armistice Day, November 11, 1928, 
speech before the American Legion said, referring to the Anglo- 
French Compromise: 

During last summer France and England made a tentative offer 
which would limit the kinds of cruisers and submarines adapted to 
their use. The United States of course refused to accept this offer. 
Had we not done so, the French Army and the British Navy would 
be so near unlimited that the principle of limitation would be virtu- 
ally abandoned. 

Much less temperate was the commentary in the American press, 
and the United States navy's agitation for fifteen new cruisers 
was a concrete reply to the Franco-British proposals ; the general 
outcry in the United States against those proposals greatly 
weakened the opposition to the cruiser bill. 88 


The Japanese reply, dated September 29, was brief and to the 
point. The Government expressed "its concurrence to the purport 
of the present agreement," adding, however, that since the 

maximum tonnage of large cruisers and submarines to be applied in- 
discriminately to all countries must, from the point of view of na- 
tional security and of alleviation of the burden on the people, be sat- 
isfactory to various countries whose circumstances are different, it 

as For an account of the adoption of the bill, see pp. 371 ff. 


considers the agreement in question needs to be most carefully drawn 
up and just. 


The German Government was alarmed by the news of the naval 
compromise to which the British Foreign Secretary referred in 
the House of Commons, and feared that some concession on the 
part of Great Britain in regard to the limitation of land forces 
was the price paid for the agreement. Considerable color was lent 
to this view by numerous articles in the French press which attrib- 
uted far-reaching importance to the bargain. In the matter of 
limitation of land forces Germany was vitally interested, but as 
this accord was, on the surface, a naval matter the governments 
concerned did not feel obliged to submit the proposal for German 
approval. Nevertheless the British Ambassador at Berlin asked 
for instructions. He was authorized to inform the Secretary of 
State of the Reich that the text of the compromise referred exclu- 
sively to naval limitation, but there was an understanding with 
the French Government that if it could meet the British Govern- 
ment on the questions of naval limitation the latter would be pre- 
pared to withdraw its opposition to trained reserves. Thus Ger- 
many's fears were realized. 


The Italian Government's reception of the proposals was more 
discouraging to the French than to the British, for the reasons 
stated in the rejection were the very ones which the French had 
been in the habit of stating so eloquently at Geneva, namely, that 
there could be no separate discussion of the naval problem, but 
only one which considered limitation in the broadest and most 
logical manner from its three aspects, military, naval, and aerial. 
Furthermore, the Italian Government repeated the stand it had 
taken ever since the Washington Conference that as regards limi- 
tation generally, it was "disposed a priori to accept as the limit 
of its own armaments any figures, however low they might be," 
provided that they were not exceeded by any other European con- 
tinental Power, meaning, of course, France. This persistent de- 


mand for parity with France had already emerged at the Wash- 
ington Conference; there Italy made good its claim for equality 
in naval strength with France, equality at least in capital ships ; 
the economic plight of France and the deteriorated condition of 
its navy in 192122 conspiring to bring about what the French 
have termed the "decapitation" of their navy. Ever since France 
and Italy were given the same "chiffres de prestige" French 
diplomacy has been directed toward breaking that equality and 
Italian toward maintaining it. 

The special exigencies of national defense demand that Italy 
seek the principle of global rather than of category limitation. 
Italy has only three lines of communication with the rest of the 
world, three channels for its supplies: Port Suez, Gibraltar, the 
Dardanelles. With a long coast line, heavily populated cities, and 
vital centers either on its coast or within a short distance, Italy's 
defense needs must depend in large measure on the pace set by its 
strongest Mediterranean rival. Global tonnage, by leaving Italy 
free to adopt those types which best respond to the exigencies of 
its own safety, would allow it within its budgetary capacity to 
outdo France, perhaps even the British Mediterranean fleet, in 
the types to which it might throw its whole tonnage allowance. 

The Italian note ended by suggesting that the five signatory 
Powers of the Washington Treaty agree to postpone until 1936 
the construction of those capital ships which the Treaty would al- 
low them to lay down during the period 1931-36. The adoption 
of such a modification, the note argued, would provide the world 
with a tangible proof of the pacific sentiments of the five greatest 
naval Powers ; at the same time it would leave the fleets of the sig- 
natory Powers in the same relative situation as that laid down by 
the Treaty of Washington for 1931. 


That the compromise would bear no fruit unless the United 
States in particular agreed to accept it was obvious from the 
moment it was entered into. No effort was made to explain why 
Great Britain should have supposed that the United States would 
accept a proposal more objectionable to it than the one made by 


the British delegation at the Geneva Naval Conference. In view of 
the American reply and the general condemnation of the British 
press Lord Cushendun announced in the House of Lords on No- 
vember 7, 1928, that the Anglo-French Compromise as a specific 
proposal was dead. But the announcement of Lord Cushendun 
still left the question open whether the Anglo-French Compro- 
mise was a set of proposals to be submitted to the other Powers for 
their consideration or whether it was to remain the basis of a 
working entente which was to continue even if the specific pro- 
posals should not be accepted by the other Powers, for the French 
Government suggested that 

whatever the result, and even should this hope (i.e. getting the ap- 
proval of the United States to the compromise) prove illusory, the 
two Governments would none the less be under the urgent obligation 
to concert either to ensure success by other means or to adopt a com- 
mon policy so as to deal with the difficulties which would inevitably 
arise from a check to the work of the Preparatory Commission. 89 

In view of the fact that this pregnant suggestion was left unan- 
swered by the British Government, Lord Thomson asked in the 
House of Lords 40 whether silence meant consent. Such a sugges- 
tion, said Lord Thomson, required an answer. 

No answer was sent to it, for a very good reason [said Lord Cush- 
endun]. It is a very disagreeable thing among friends, whether they 
be nations or ladies [he went on to say] to be obliged to repel ad- 
vances, and his Majesty's Government felt that while that particular 
in the Note was vaguely expressed and did not make any specific pro- 
posal, it might appear to suggest something in the nature of a closer 
political alliance rather than a mere attitude of friendliness or en- 
tente which existed between the two countries. 

If the compromise had not been completely withdrawn the vague- 
ness on this point would have resulted, whenever the French found 
that the British did not believe there was a binding agreement, in 
a charge of deliberate bad faith on the part of Great Britain; 

39 Cmd. 3211, 1928, pp. 25-26. *<> London Times, November 8, 1928. 


Lord Cushendun ought to know what happens when either a na- 
tion or a lady makes clear-cut demands upon an ambiguous rela- 


THE most striking sequel to the failure of the Anglo-French 
naval understanding was the impetus it gave Congress to vote the 
bill authorizing the construction of fifteen cruisers and one air- 
craft carrier. The history of this legislation goes back to the 
failure of the Three Power Naval Conference at Geneva. 

Immediately after the breakdown at Geneva, notwithstanding 
President Coolidge's announcement that "the failure to agree 
should not cause us to build either more or less than we otherwise 
should, 5 ' 41 Curtis D. Wilbur, Secretary of the Navy, submitted to 
Congress on November 14 the following bill: 

For the purpose of further increasing the naval establishment of 
the United States the President of the United States is hereby au- 
thorized to undertake the construction of the following vessels : 

Twenty-five light cruisers ; nine destroyer leaders ; thirty-two sub- 
marines, and five aircraft carriers ; 

Section 2. The construction of light cruisers and aircraft carriers 
herein authorized shall be subject to the limitations prescribed by the 
treaty limiting naval armaments ratified August 17, 1923. 

Section 3. In the event of an international conference for the 
limitation of naval armaments the President is hereby empowered, in 
his discretion, to suspend, in whole or in part, any construction au- 
thorized by this act. 

In a letter accompanying the draft bill, Secretary Wilbur esti- 
mated the aggregate cost of this new naval program at $725,000,- 
000, and relying upon authority rather than upon logic flattered 
the taxpayers with the additional statement that the draft bill 
was not in conflict with President Coolidge's desire for economy. 
While the Secretary of the Navy was asking Congress for this 
huge expenditure, Mr. Bridgeman, First Lord of the Admiralty, 
announced in the House of Commons that the British Govern- 
ment had decided to drop two out of the three cruisers which, 
under the existing naval program, were scheduled to be laid down 

4i United States Daily, November 19, 1927. 


in 1927. In American naval circles, however, this British an- 
nouncement was regarded as a belated gesture ; the sponsors of a 
big navy were determined to consummate the "victory" they had 
gained at Geneva. 

The proposed bill "fixed no time for the beginning or comple- 
tion of the ships therein named," Mr. Wilbur pointed out to the 
House Committee on Naval Affairs. This he said was "in accord- 
ance with the desire of both the President and the Navy Depart- 
ment." On being asked when the Department intended to complete 
the proposed program, the Secretary of the Navy replied that the 
provisions of the bill would be carried out within five years, at the 
end of which time it would be supplemented by a continuous 
building and replacement program spread over twenty-year 
cycles. 42 The House Committee on Naval Affairs outdid the au- 
thors of the bill by inserting a fixed time limit of five years for 
laying down and eight years for completing the vessels, and it 
struck out the clause giving the President discretion to suspend 
construction in the events contemplated under Section 3. 

Senator Borah opened the attack on the bill in the Senate by 
denouncing it as "sheer madness" which would lead to "immediate 
and inevitable war" a Punic war involving the cruiser in place 
of the trireme. American public opinion was aroused and began 
to express itself through the medium of influential individuals, 
and organizations like the Society of Friends, Federal Council of 
Churches, the World Alliance for International Friendship, and 
the Church Peace Union. The London Times, 43 editorially, de- 
clared that the 

Government of the United States ... is now definitely embarked on 
an armaments program that is in fact competitive, is by implication 
provocative, and to judge by the number of hints, pointers, and allu- 
sions, is at least designed partly with the object of making a strong 
impression on British public opinion. 

Under the pressure of public opinion, the Administration was 
obliged to modify its original proposals. In place of the Butler 
Construction Bill introduced in the House, December 14, 1927, 

42 United States Daily, January 13, 1928. 

43 December 17, 1927. 


which contemplated the building of seventy-one vessels at a cost 
of $725,000,000, a new bill was introduced calling for the con- 
struction of fifteen ten-thousand ton cruisers and one aircraft 
carrier at a total cost of $274,000,000. Under this bill 44 the Presi- 
dent was empowered to suspend construction in the event of an 
"international agreement for the further limitation of naval 
armament, to which the United States is signatory." A time limit 
requiring the President to undertake construction of fifteen 
cruisers within three years, and an aircraft carrier prior to 
June 30, 1930, was inserted over the President's objection. The 
Navy Cruiser Bill was reported to the House on March 3, 1928, 
and passed on March 17 by a vote of 287 to 58. The anger which 
had led to the introduction of the original bill in the Lower House 
had subsided and counsels of moderation prevailed. Had the origi- 
nal bill become law, it would have appeared nothing less than a 
challenge to Great Britain. The bill, pruned down from seventy- 
one ships costing $725,000,000 to sixteen ships costing $274,000,- 
000, was more like a "retort courteous" to the British attitude 
than a "countercheck quarrelsome." In this form the bill was re- 
ported to the Senate on May 3, 1928 ; it was left to stand over 
until the next session. 

Meanwhile two international events of great significance oc- 
curred. While negotiating with Secretary Kellogg for a multi- 
lateral treaty for the renunciation of war, which was signed at 
Paris on August 27, 1928, M. Briand was at the same time con- 
cluding with Sir Austen Chamberlain the so-called Anglo-French 
Naval Compromise. The British and French governments showed 
as much logical consistency in combining negotiations for the 
Pact of Paris and the Naval Compromise as President Coolidge in 
urging the Senate to give its advice and consent to the Pact of 
Paris while publicly approving the action of the lower House 
which voted the construction of fifteen cruisers and one aircraft 
carrier. The great nations are wont to advance warily into the 
future, an olive branch in the left hand and a sword in the right. 

44 The original Butler Bill contemplated suspension of building "in the event of 
an international conference for the limitation of naval armaments," whereas the 
bill as enacted allows suspension only in case of an agreement to which the United 
States is signatory. 


The closeness which curtained the Anglo-French Naval Com- 
promise and the nature of the proposals together produced on 
American public opinion an effect which weakened the opposition 
to the cruiser bill ; President Coolidge also adopted an unusually 
vigorous tone in his Armistice Day address 45 which produced an 
unpleasant impression in Europe. Referring to the naval under- 
standing he said : "It no doubt has some significance that foreign 
governments made agreements limiting that class of combat ves- 
sels in which we were superior but refused limitation in the class 
in which they were superior." His annual message to Congress 
urged immediate action on the Cruiser Bill. 

The Senate, having given its advice and consent to the Pact of 
Paris on January 15, turned its attention to a consideration of the 
Cruiser Bill. Senator Borah lifted the debate out of the vague re- 
gion of general "defense" and projected it into the realm of re- 
ality when he declared that "we are on the eve of a naval race with 
Great Britain. The situation is not dissimilar to the situation 
existing between Germany and Great Britain from 1905 to 
1914." 46 His solution for the difficulty was along the traditional 
American line which assumes a belligerent Great Britain and a 
neutral America, and the amendment he proposed called for an 
agreement on neutral rights. 

If we cannot have an agreement [he declared] with reference to 
the use of the sea, if our commerce depends for its protection entirely 
upon the navy, if England stays with the proposition that she pro- 
poses to dominate the sea, we will build a navy superior to England's 
undoubtedly . . . but . . . before ... we start on a naval race, we 
ought to make every effort possible, first, to bring about a complete 
understanding with the naval Powers with reference to naval build- 
ing, and secondly a complete understanding with reference to the 
freedom of the seas. 

Senator Borah defined "freedom of the seas" as the 

right of neutral nations to carry their commerce as freely in time of 
war as in time of peace except when they carry actual munitions of 

4e New York Times, November 12, 1928. 

46 Congressional Record, 70th Congress, 2d Sess., p. 2179. 


war or when they actually seek to break a blockade. But the blockade 
must be a blockade sufficient to prevent the passage of ships and not 
merely a paper blockade. But as to all legitimate commerce, outside 
of the actual munitions of war and outside of speeding to a particu- 
lar port where it is blockaded, there ought not to be any interference 
with the neutral powers. A minimum of belligerent rights and a maxi- 
mum of neutral rights. 47 

He further objected to the time-limit clause for the construc- 
tion of the ships on the ground that it would hamper freedom to 
negotiate with reference to disarmament and "freedom of the 
seas" during the coming year or two, and urged Senator Hale to 
strike it out ; but the Senate, by a vote of 54< to 28, rejected a mo- 
tion to eliminate the time-limit clause, 48 the Senators who voted 
against the motion contending that it was better to have "steel 
cruisers than paper ones." The great majority of the Senators 
wanted either cruisers or naval-limitation conferences; the real 
issue was over the question which should come first. Those who 
contended that cruisers should come first asserted that "freedom 
of the seas" is possible to those who have the power to claim it, 
and that power could be acquired if the United States matched 
Great Britain in cruiser strength before making its demand. 
These Senators argued that when the United States was superior 
in battleships, Great Britain agreed to limit them ; but as long as 
the United States was inferior in cruisers, Great Britain blocked 
their limitation. A large cruiser fleet would give the United States 
more with which to trade and thus bring about a limitation agree- 

Those who opposed the bill deprecated the millions to be spent 
on cruisers which "will be junk from the moment they are 
launched and be of little or no value in case of war." Senator 
Brookhart declared that the building of these ships "is insincere," 
and "a preparation for war itself when we have denounced and 
condemned war by the peace treaty." 

47 Ibid., p. 2182. Many writers on international law will refuse to accept this 
definition, and in such a connection "minimum" and "maximum" are bound to be 
arbitrary terms. 

48 Ibid., p. 2762. 


The cruiser bill passed the Senate, February 5, 1929, by a vote 
of 68 to 12, and became law when President Coolidge signed it on 
the 13th. The principal clauses of the bill provide that 

the President of the United States is hereby authorized to under- 
take prior to July 1, 1931, the construction of fifteen light cruisers 
and one aircraft carrier according to the following program : 

(a) Five light cruisers during each of the fiscal years ending June 
30, 1929, 1930 and 1931, to cost, including armor and armament, 
not to exceed $17,000,000 each. 

(b) One aircraft carrier prior to June 30, 1930, to cost, includ- 
ing armor and armament, not to exceed $19,000,000 . . . 

Sec. 4. In the event of an international agreement, which the 
President is requested to encourage, for the further limitation of 
naval armament, to which the United States is signatory, the Presi- 
dent is hereby authorized and empowered to suspend in whole or in 
part any of the naval construction authorized under this Act. 

Sec. 5. That the Congress favors a treaty or treaties with all of 
the principal maritime nations regulating the conduct of belligerents 
and neutrals in war at sea, including the inviolability of private 
property thereon : 

That such treaties be negotiated, if practically possible, prior to 
the meeting of the conference on the limitation of armaments in 1931. 


The German Demand. 

The growing impatience of the world over the fruitless efforts 
of the Preparatory Commission to agree on a formula for the re- 
duction or limitation of armaments found expression in the ninth 
League Assembly which met at Geneva in 1928. Chancellor 
Miiller of Germany, in a speech at the seventh plenary meeting of 
the Assembly on September 7, declared that he viewed with seri- 
ous concern the present situation of the disarmament question. 
The failure of the League to solve it "is bound to produce the 
most serious consequences," he said, reminding the Assembly at 
the same time that the problem was not incapable of solution in a 
relatively short time. He asked whether immediate disarmament 
were considered impossible for those who had won in the World 
War. Declaring that Germany had not tried to make unreasonable 


demands, but had merely been asking others to do voluntarily 
what had been done for it by the victors, Herr Miiller electrified 
the Assembly by stating that 

the disarmament of Germany cannot possibly continue to be a uni- 
lateral act, the outcome solely of the power wielded by the victors in 
the world war. The promise that Germany's disarmament would be 
followed by general disarmament must be fulfilled, and, finally, the 
article of the Covenant which incorporates that promise as a basic 
principle of the League of Nations must be carried into effect. 49 

The German delegation contended vigorously for the calling of a 
general disarmament conference during the year 1929, notwith- 
standing the failure or success that might attend the Preparatory 
Commission in reaching an agreement upon the technical ques- 
tions which have hitherto prevented the calling of the conference. 
The dialectic between Germany and France, with Italy in the 
offing, was now transferred from the Preparatory Commission's 
chamber to the Assembly arena. The answer to the German chal- 
lenge was made by M. Briand it was a non possumus coupled 
with a plea for patience and caution. That Germany had carried 
out the terms of the Treaty was true, but this action was recent 
and reluctant. It was not enough for France that Germany was 
disarmed within the meaning of the Treaty. The real fear which 
still haunted France was the recuperative power which Germany 
had shown despite the burdens imposed upon it by the victorious 

Who would care to maintain [asked M. Briand] 50 that a great 
country, so powerfully equipped for peace that is to say, for indus- 
trial development, would be at a loss to supply an army with war 
material? Germany has just shown the world a magnificent example 
of what she can do. Her mercantile marine was reduced to nil. Within 
a few years, making the utmost use of her productive powers, her 
constructive ability and the admirable skill of her people, she recre- 
ated it, and now the German merchant service is among the first in 
the world. 

* 9 Verbatim Record of the Ninth Ordinary Session of the Assembly of the 
League of Nations, Seventh Plenary Meeting, p. 3. 
oo Ibid., Tenth Plenary Meeting, p. 8. 


No single speech has so much revealed how profoundly war and 
peace involve all social existence, and, by inference, how small a 
segment of the problem is subtended by the technical questions of 

The Assembly refused to be discouraged by the lack of progress 
and ordered the Preparatory Commission to continue its work. 

The Hoover Demarche. 

The Commission met at Geneva in April, 1929, faced with a 
deadlock in the matter of naval disarmament, and in the midst of 
the general biliousness induced by the abortive Anglo-French 
naval understanding of the previous October, but this meeting 
was to prove one of the most promising in the life of the Com- 
mission. Ever since the inauguration of President Hoover in 
March, 1929, the world had been waiting for some demarche in 
connection with the fulfilment of the statement in his inaugural 
address that 

peace can be promoted by the limitation of arms and by the creation 
of the instrumentalities for the peaceful settlement of controversies. 
I covet for this administration a record of having further contrib- 
uted to advance the cause of peace. 

The demarche came when Mr. Gibson, the United States dele- 
gate to the League Preparatory Commission, by announcing that 
his Government was disposed to accept the French naval pro- 
posals with the method of tonnage by categories, dispelled the 
gloom which surrounded the discussion of the Soviet disarma- 
ment proposals. 

Under this method [Mr. Gibson explained] a total tonnage is as- 
signed to each nation and this total divided among categories of 
ships by specified tonnages. . . . Certain modifications were sug- 
gested in informal discussion, so as to provide that the tonnage allo- 
cated to any given category might be increased by a certain per- 
centage to be agreed upon, such increase to be transferred from any 
other category or categories not already fixed by existing treaty. 51 

6i League of Nations, C. 1895. M. 74, 1929, IX, 56. 


This is a partial acceptance of the French proposal, a sort of 
syncretic plan to allow a smaller naval Power the privilege of 
partial concentration on a special type for coast or regional de- 
fense, but not to such an extent as to threaten the mastery of the 
two great sea Powers over the major waterways of the world. 

Mr. Gibson made a further suggestion concerning a basis of 
comparison for categories in which there are marked variations 
as to the unit characteristics. "It might be desirable in arriving 
at a formula for estimating equivalent tonnage," he said, "to 
consider certain factors which produce these variations, such as 
age, unit displacement, and caliber of guns." In evolving this 
"yardstick," it was understood that the United States favored a 
system of index numbers under which would fall the characteris- 
tics of speed, age, cruising radius, displacement, etc. The adop- 
tion of proposals on this line would relieve the tension created by 
the demand for "parity," although not of course establishing 
equivalence of all the factors which the demand for "parity" in 
its extreme forms has insisted should be brought into account, 
such as naval bases, merchant marine and its personnel considered 
as "reserves," oil resources, and so on. 

Naval Parity. 

The acceptance by Great Britain of the naval equality of the 
United States involved a fundamental change in the British tra- 
ditional claim to the sovereignty of the seas. From the Spanish 
Armada to the battle of Jutland, every forcible challenge to 
British supremacy at sea had resulted in war. Until the Washing- 
ton Conference no effort had ever been made to adjust by peace- 
ful negotiation the relative naval strengths of the great Powers, 
and at Washington the British delegation, faced with the alter- 
native of a costly naval competition with the United States, the 
outcome of which would have wrested supremacy from Great 
Britain, were understood as agreeing to the principle of naval 
equality. Yet the specific agreements entered into left the two 
fleets unequal in fact. 52 The problem of cruisers and lesser craft 
was still to be determined, and it was by no means so easy to agree 

52 Hector C. Bywater, Navies and Nations, p. 142. 


upon definitions, reductions, and limitations in the case of cruisers 
and lesser craft as it was in that of battleships and battle 
cruisers. 53 The difficulty in the case of the cruisers was one of naval 
strategy. And here again appears the fact that every move in, the 
disarmament sphere is part of the larger chess game for relative 
power. Battleships and battle cruisers move as a unit from defined 
bases and within a defined radius. Their main, virtually their sole, 
function is that of battle to seek out and destroy the enemy's 
fleet. Parity as applied to this unit may perhaps be roughly meas- 
ured in terms of gunnage and tonnage. But cruisers earn their 
keep mainly by protecting their own commerce or by intercepting 
the commerce of the enemy. 54 Hence out of this difference in 
function arises the difficulty of applying parity to cruisers, parity 
being a term which really looks to battle odds. 

Aside from these considerations, the term "parity" is ambiguous. 
It may be used in at least two senses, that is, as indicating naval 
policy or naval technique. In the field of policy naval "parity" has 
nothing to do with a meticulous quest for equality in battle odds : 
it implies equality in power and prestige, both of which of course 
may be used for cooperation. In naval technique "parity" seems 
to presuppose equal battle odds so that neither state could rule the 
seas in war time; here the considerations which enter into the 
term are not simple mathematics but higher calculus; gunnage, 
tonnage, age, speed, armor, a fixed coefficient of defense intel- 
ligible only to naval savants, begin to enter as criteria for naval 
equality. The fact is that technically, "parity," like every other 
abstract standard of armaments, is an absurdity impossible of 
attainment ; it is an idea, which, like an incantation, benumbs an 
intelligent grasp of the subject. There are factors, such as geog- 
raphy, wealth, population, natural resources, merchant marine, 

ss Battleships and battle cruisers are "warships of great displacement that em- 
body the maximum armament protection and mobility which it is practical to com- 
bine in a single vessel. In the battle cruiser armament and protection are in some 
degree sacrificed to speed." Cruisers are "warships of medium displacement in 
which moderate armament and protection are combined with great speed." Cmd. 
3211, 1928, p. 4. 

54 See Lord Jellicoe's remarks in Records of the Conference for the Limitation 
of Naval Armaments, Senate Document No. 55, 70th Congress, 1st Sess. 


which do not lend themselves to practical measurement, and yet 
form vital considerations in a nation's military or naval strength. 
It may even be said that were armored ships abolished supremacy 
at sea might still fall to the nation which possessed the largest 
merchant marine; 56 did standing armies not exist, wars, deadly 
wars embracing all civilized peoples, could still be fought by citi- 
zen soldiery as in the times of Athenian Allies and Peloponnesian 
Confederates. One reason why war is more terrible than it was in 
the days of absolute monarchy is, as Vice-Marshal Brooke-Pop- 
ham has pointed out, that now the will of the whole people must 
be broken in order to win. If we live in the shadow of war it is 
difficult to see how any nation can be content with an equality of 
naval strength which implies equal mathematical "battle odds"; 
common prudence would be suspiciously tenacious in negotiating 
every detail in order to insure victory or at least the possibility of 
escaping defeat. 

But if "parity" may be regarded as a political principle to 
control naval policy 56 related to national security as well as to 
those interests of each nation which lie beyond the bounds of na- 
tional defense, on this basis it would matter less and less what 
ships each civilized nation possesses, always bearing in mind that 
disarmament should proceed proportionally and disparity should 
not be so glaring as to arouse the popular feeling of insecuritv 
which feeds competition in the building of fighting ships. In the 
hope of initiating such a process President Hoover declared 
through Mr. Gibson at Geneva that the United States was willing 
to make concessions for the sake of facilitating the reduction and 
limitation of armaments. 

Land Effectives. 

Whereas Mr. Gibson's overture on naval ratios opened the way 

55 For June, 1928, Lloyd's Register showed that Great Britain possessed 32 per 
cent of the world's merchant tonnage; the United States, 17.8 per cent; Japan, 6.5 
per cent; Germany, 6 per cent. 

co "It is for the Government of the day to instruct the Admiralty as to what 
contingencies they are to provide for; and it is not for the Admiralty to decide up 
to what standard they should build," said Viscount Grey in the House of Lords, 
London Times, November 7, 1928. 


out of one of the impasses which for three years have held the 
Preparatory Commission at a standstill, his overture on "trained 
reserves" seems to have closed a door which British and American 
diplomacy had been struggling hard to keep open for an equal 
length of time by insisting that "trained reserves" should be taken 
into account in estimating the strength of land armies for pur- 
poses of evaluating "land effectives." He announced that the 
United States Government was disposed "to defer to the views of 
the majority of those countries [i.e. France and its supporters] 
whose land forces constitute their chief military interest, and in 
the draft Convention before us to accept their ideas in the matter 
of trained reserves." 57 In this capitulation the United States Gov- 
ernment repeated the concession to the French which the British 
Government had made in the Anglo-French naval bargain. Lord 
Cushendun, in the name of Great Britain, four days before his 
government was voted out of office, signified his concurrence in 
Mr. Gibson's proposal ; but the advent of the Labour Ministry in 
England brought about a renewal of the previous government's 
attitude toward "trained reserves." It does not seem likely how- 
ever, that the conscriptionist Powers, like France and Poland, can 
be induced to bring their great reserves of man power into the 
reckoning. Thus on the European continent two opposed systems 
will be left in existence : that imposed by the four European peace 
treaties upon Germany and its former allies, and that maintained 
by the victors. This makes the limitation of military effectives 
more difficult, though not necessarily impossible. 


The Economics of Armaments. 

The magnitude of armaments can most easily be brought to the 
consciousness of the people by reference to the world's military 
and naval budgets. The League of Nations Preparatory Com- 
mission was early confronted with suggestions for budgetary re- 
strictions as a means for checking increasing armaments. The 
more optimistic members felt that in budgetary limitation lay 

57 League of Nations, C. 195, M. 74, 1929, IX, 114. 


great hopes for advancing the Commission's work. So diverse 
were the views presented in debate that an expert body consisting 
of members of the Financial and Economic Committees and of 
some other League bodies was constituted to investigate the possi- 
bilities of budgetary restriction and armaments costs. The first 
question put to the Committee was the following: 

"Can the magnitude of the armaments of various States be 
compared by comparing their military expenditure, and, if so, 
what method should be followed?" 

The answer given was that owing to the many differences, inter 
alia, in price levels, salaries, and wages, in accounting systems, 
in the costs arising out of the diversity in military and naval 
organization, viz., voluntary army versus compulsory service, no 
direct comparison could be valid. 

But comparison of * annual figures in one country for the pur- 
pose of determining the rise or fall of expenditure does not meet 
with the same objections. Making the necessary correction for 
variations in price levels, a study of defense expenditure reveals 
with a fair degree of accuracy the trend and development of 
armaments in that country. With this end in view a specimen 
draft of defense expenditure in the form of a questionnaire was 
drawn up and considered by the technical delegates as a practical 
method of obtaining information concerning the movement of 
armaments costs of the various states. 

The Committee was asked to explore the possibility of using 
"Defense Budgets" as a basis for limiting the armed forces of a 
nation. The limitation on budget appropriation for defense, the 
Committee found, would reduce armaments to some degree, but if 
used as an exclusive index the method would be unsatisfactory. 
Budgetary limitation involves "control," and some nations, no- 
tably the United States and Italy, are opposed to international 
supervision or control, whereas France and its allies are unwilling 
to trust to the good faith of the signatories. 68 The mechanics of 
control now rests in a condition of deadlock. Consideration of this 
problem, like that of so many other vital problems which the Pre- 
ss Great Britain now takes a midway position. 


paratory Commission has dealt with, has been postponed to some 
future time. 

A statistical survey of pre-war expenditures for military and 
naval defense, whatever other value it may have, indicates the 
growth of fear under the stimulus of armament competition and 
an increasing wealth to indulge it. 

Defense expenditure in dollars (millions). 

1858 1888 1908 1918 1928 
Great Britain 111 140 295 385 675 

United States 



































The above table 59 shows that the great Powers spent five times 
as much on armaments in 1913 as they did in 1858. 60 The in- 
crease in armaments expenditure between 1908 and 1913 was in 
most cases more than 50 per cent. In those years, it is estimated 
that European Powers spent $45,000 million, of which $38,500 
million, or more than five-sixths, were spent by Great Britain, 
France, Germany, Italy, Austria-Hungary, and Russia. 

These armaments expenditures form a major part of most na- 
tions' total budgets. The total British budget amounted in 1928 
to 750 million, of which 400 million went to pay for past wars, 
about 65 million for war pensions, and some 115 million for 
current armaments expenditures ; i.e., 14tf. in the pound of cost of 
government is attributable to war. The French budget reveals 
similar proportions. In the United States the expenditure attrib- 
utable to war (i.e., service of war debt, war pensions, and current 
armaments expense) represents 80 per cent of the total Federal 
budget. 61 Appropriations for the War and Navy Departments 
alone from 1914 to 1929 were: 

59 Economist, Armaments Supplement, October 19, 1929. The figures for the 
United States are taken from the Annual Report of the Secretary of the Treasury, 
June, 1929. 

eo If the average rise in prices between the two dates were taken into account, 
the above estimate would be reduced by about 45 per cent. 

si Annual Report of the Secretary of the Treasury, June, 1929. 




War Department 

Navy Department 



$ 194,939,626 

$ 144,982,647 

$ 339,922,173 





























































In spite of all these vast outlays, ostensibly in the name of 
self-protection, the great Powers have had less peace than have 
neutral countries like Sweden and Switzerland. Incurring no debt 
for armaments purposes and maintaining forces so small in num- 
ber as to be useful only for territorial defense, these two nations 
have enjoyed peace for 100 years at a low price. The yearly arma- 
ment cost is less than one-third of the total Swiss budget, and one- 
fifth of the Swedish. 62 

The "war to end war" has not reduced armaments expenditure, 
for Europe in 1928, in spite of the enforced disarmament of the 
former Central Powers, spent $2,620,000,000, or $225,000,000 
more than in 1913, 68 approximately 30 per cent more on the aver- 
age for the armed countries than they spent in 1908. 64 

The people who inhabit the United States are not biologically 
less quarrelsome than other folk; their geographical immunity 
relieves them of such intrigues and alliances for strength, arma- 
ment preparations, and the neurosis of defensive attack as have 
made the nightmare of the European peoples. Of the present 
world expenditure on armament a total of about four and a half 
billion dollars 60 per cent is spent by the European countries, 
about 20 per cent by the United States, and 20 per cent by the 
rest of the world. 65 It is evident that economic power is not the 

02 Armaments Year-Book, 1928-29. 

63 Figures take into consideration the changes in price levels. 

e* Economist, Armaments Supplement, October 19, 1929. 

65 These figures represent minimum costs. If such defense measures as strategic 


sole measure of war preparation. The income of the 120 million 
inhabitants in the United States, estimated at a total of $80,000 
million, is as large as that of Europe with 480 million inhabitants, 
yet the United States is responsible for only 17 per cent of the 
world's armaments expenditures, as against Europe's 66 per cent. 
The Economist believes that 

if Europe devoted to armaments the same percentage of its aggre- 
gate income as the United States of America, it would be spending, 
not at the rate of 524 million a year as at present, but something 
like 160 million. That would mean universal reduction to the level 
of armaments now obtaining in Switzerland or Austria, or, in other 
words, the elimination of all aggressive elements in the defense or- 
ganizations of European countries. 

And Sir Josiah Stamp estimates that maintenance of the present 
armaments reduces the European standard of living by about 10 
per cent. The heavy burden of European armaments is propor- 
tionate to European anxieties. 

The price paid by Germany in national pride in accepting the 
disarmament forced upon it at Versailles is coming back to it in 
economic blessings. Germany would have had much greater diffi- 
culty in meeting its obligations under the Dawes Plan but for 
Section V of the Treaty of Versailles. 66 In the last five pre-war 
years Germany spent on its army and navy (exclusive of pen- 
sions) : 

(000,000 omitted) 


1909 1,288.6 

1910 1,266.8 

1911 1,276.6 

1912 1,392.6 

1913 1,947.7 

Average . . . 1,435.0 

railways, protection of key industries, and compulsory military service of Conti- 
nental Europe all economically wasteful were taken into consideration, the real 
costs would be much greater. The figures would then be, two-thirds for Europe, 
one-sixth for the United States, and one-sixth for the rest of the world. 
ea See James W. Angell, The Recovery of Germany (1929), chap. ix. 


Its post-war armaments expenditures (exclusive of pensions) 
including war charges are : 67 

(000,000 omitted) 


1924 497.8 

1925 621.3 

1926 658.1 

1927 717.2 

1928 715.6 

1929 (estimate) 666.0 

German post-war expenditure, price levels being equated, is 
about one-third that of the pre-war figures. Expenditure for 
armaments has steadily risen, but this has involved no breach of 
the Treaty. 68 The increase in costs has gone toward improving the 
quality of material and the training of men. 

Security and Armaments. 

Security is the dogma of the insecure, the most important god- 
dess of the trinity security, arbitration, and disarmament 
which the League has erected in its quest for a formula to bring 
about reduction and limitation of armaments. The great exponent 
of the security cult is France, the prime mover throughout the 
post-war history of security. For five years after the signing of 
the Treaty of Versailles, the French Government directed its di- 
plomacy toward the making of an anti-German bloc in Europe and 
an alliance with Great Britain against any future German ag- 
gression. The heroic effort of the League of Nations to generalize 
and extend security to all its members by means of the Geneva 
Protocol of 1924 was the inspiration of France, and the Treaty 
of Locarno was a specialized and an abridged edition of the gen- 
eral French thesis contained in the defunct Geneva Protocol. 

The deadlock in the Preparatory Commission on this point of 
security, the increasing tendency of France and Italy to place 
their trust in alliances, the German insistence on some corre- 

67 Armaments Year-Book, 1928-29, p. 457. 

s The distinguished soldiers of the Allies who spent months working out a dis- 
armament plan for Germany overlooked the principle of limiting armaments ex- 


spending measure of disarmament on the part of its ex-enemies, 
brought home to the League the necessity for further effort along 
the path of security. The Preparatory Commission, created to 
solve the problem of disarmament qua disarmament, could not get 
away from the problem of security. After the entry of Germany 
into the League, the French became more insistent upon the thesis 
that there can be no disarmament without security ; now that Ger- 
many could voice at the international council table its insistence 
that Article VIII of the Covenant be carried out, France's feeling 
of insecurity appeared to increase. 

In the present state of international organization, League ef- 
forts are mainly in the stage of unratified conventions or the ap- 
pointment of committees. In 1927 a Security Committee was cre- 
ated "to consider . . . the measures capable of giving all States 
the guarantees of arbitration and security necessary to enable 
them to fix the level of their armaments at the lowest possible fig- 
ures in an international disarmament agreement." 

At the outset the Security Committee met with a severe shock 
when Mr. Hugh Wilson, speaking for the United States, an- 
nounced that his Government felt itself unable to cooperate in the 
labors of the Committee, stating a reason which the League has so 
often heard the historic American determination to leave to Eu- 
rope those matters which are peculiarly their own concern without 
the participation of the United States therein. This declaration 
was a serious handicap to the Committee. The League has often 
asked whether economic realities have not triumphed over politi- 
cal myths. American economic penetration to every corner of the 
world has made it politically impossible to maintain the historic 
attitude of isolation, and by note or otherwise the United States 
presents ever more frequently a lively American interest in the 
complications in various parts of the world in which diplomacy 
comes to the support of investments and trade. But in respect of 
an organization for general security the League's question re- 
mains unanswered, for under the United States Constitution the 
distribution of domestic control over foreign affairs makes such 
questions embarrassing for a particular organ of government. 69 

69 See the Survey, 1928, pp. 83-148. 


Yet in the highly complex and politically difficult problem of 
achieving security and "security" here is really another word 
for sanction the position and desires of the United States must 
play an important, if not a decisive part, when the sanctions are 
brought into play. This may be illustrated by the case of an "eco- 
nomic blockade" which might be invoked by members of the 
League under Article XVI of the Covenant; Great Britain and 
the other large trading nations lack assurance that if they cut off 
commercial and financial relations with a nation recalcitrant to 
its obligations to keep the peace (whether under League Cove- 
nant or Paris Pact) America will not insist on carrying on trade 
with that nation. 

The Security Committee nevertheless set to work to explore the 
measures capable of furnishing guaranties of arbitration and se- 
curity as conditions precedent to limiting and reducing the level 
of armaments. The Committee's labors have resulted in the draft- 
ing of model treaties, which in general are based on the recom- 
mendations submitted by M. PoKtis, the rapporteur on security. 
They are as follows : 

1. The conclusion of regional pacts (in preference to separate 
treaties of non-aggression) for the pacific settlement of disputes and 
mutual assistance or of non-aggression. 

2. The chief points relating to security deal with (a) provisions 
for pacific procedure ; (b) a system of mutual assistance in coopera- 
tion with the Council of the League; and (c) condemnation of re- 
course to war. 

3. Wars of aggression are condemned, but force sanctioned by 
Article XVI of the Covenant is legal. 

The making of regional rather than general pacts was pre- 
ferred by M. Politis as the more logical and speedier method. 
After two unsuccessful attempts in 1923 and 1924, 70 it would be 
not merely useless but dangerous to the prestige of the League 
to make a third attempt, for the objections raised to the earlier 
attempts still existed. The work of the Security Committee re- 
sulted in six model conventions for the pacific settlement of inter- 

70 The Treaty of Mutual Guaranty and the Geneva Protocol. 


national disputes, three of which were general and three bilat- 
eral. 71 Three model treaties as to non-aggression and mutual 
assistance were also adopted. These differ from the Locarno Pacts 
in that they do not embody any clause guaranteeing the main- 
tenance of the territorial status quo, or provide for the coming 
into play of any automatic sanctions. Those features were neces- 
sarily omitted because it was feared that they would not be ac- 
ceptable to certain states which would otherwise adhere. The Com- 
mittee recommended a model treaty to strengthen the means of 
preventing war, a draft resolution regarding Articles X, XI, and 
XVI of the Covenant and a draft resolution to facilitate the ac- 
cession of states to the Optional Clause of the Statute of the 
Permanent Court of International Justice. The Assembly of the 
League passed resolutions placing at the disposal of the states this 
whole series of instruments with the hope that they might consoli- 
date their mutual pacific engagements. Along with the Pact of 
Paris there was now a sufficient variety to meet the needs of every 
state. The President adjourned the Security Committee sine die, 
with the blessing that "we must now leave the time factor to do 
its work." 72 

The Security Committee has done what was expected of it. It 
explored the problem, it constructed a crucible which the future 
disarmament conference hopes to fill; it could do no more. The 
value of any agreement, however comprehensive and however im- 
portant as regards the nature of the parties, is essentially relative, 
for the efficacy of the military security which it appears to give to 
the parties will, in actual fact, depend largely on the position as 
regards security of other countries linked with them by ties of 
"solidarity of a geographical or other nature." 

But objective military security is not all. Security is also a 
subjective psychological factor, a feeling which comes from the 
absence of any danger of aggression more strictly to be called 
"a sense of security." It cannot be guaranteed solely by a limita- 
tion of armaments although fostered by arms-limitation. 

No nation bent upon protecting its interests by its own strength 

71 League of Nations, C. 842, M. 100, 1928, IX. 

72 Ibid., C. 195, M. 74, 1929, IX, 195. 


feels secure when it looks upon its neighbors and upon the 
troubled state of the world. Its present defenses are "inadequate." 
Periodically the naval and military experts reveal the nation's de- 
fenseless condition. The "air raids" carried out by the Royal Air 
Force in 1928, "proved" how vulnerable was London. Defenseless 
Britain has its counterpart in defenseless America, defenseless 
France in defenseless Italy. There is always a point of fatal weak- 
ness in the national defense either in the soldiery or coast de- 
fense, in aircraft carriers or cruisers, in naval bases or air power. 
These persuasions are effective with the masses of people who have 
so long lived in the shadow of war that they cannot easily believe 
that it may vanish from the earth. 

American experience with security has undergone two distinct 
lines of development. There is the experience which looks across 
the Pacific toward Japan, and the experience with its more imme- 
diate neighbor in the north Canada. The American feeling of in- 
security arising out of the exposed Pacific coast line began to take 
on measurable proportions in the nineties. How to get the Atlan- 
tic fleet to the Pacific coast in case of need became a paramount 
and disturbing problem with the strategists of the United States 
navy, which was dramatically illustrated by the sixty-six day 
voyage of the Oregon around Cape Horn to join the Atlantic 
battle fleet in the Spanish American War. 73 

After acquisition of the Hawaiian Islands the construction of a 
canal across the Isthmus of Panama became more imperative, for 
it now seemed that with a westward extension two thousand miles 
into the Pacific American security was in greater danger than 
ever before. There was something of a "manifest destiny" ring 
about the way the "security" feeling gripped the American Gov- 
ernment in the last decade of the last century. 

On the other hand, as the United States staked its claims con- 
tinually westward in the Pacific in the name of security, Japan 
began to feel that its own security was being jeopardized. A study 
of the Japanese defense budgets from 1900 on reveals the growing 
nervousness which that nation began to experience as the result of 
the American march westward. The Japanese budget called for 

73 Survey, 1929, p. 277. 


naval expenditures of 58,274,895 yen in 1900, 65,722,122 yen in 
1910, and 483,599,712 yen in 1921. A military establishment 
which Mr. Coolidge declared 76 to be "moderate and designed ex- 
clusively for defensive purposes" alarms the Japanese, who can- 
not see that preparation "for defensive purposes" is unrelated to 
the attitude which one Power assumes to another when the days of 
irritation are born. Fear, as the Russians say, has big eyes. The 
security of one is the insecurity of the other, and "immobile for- 
tresses are the only 'defensive' weapon which could not be thrown 
into an attacking line." Bywater quotes 76 an account of the pro- 
ceedings in the Budget Committee of the Japanese Diet when the 
naval program of 1920 was under discussion : 

A MEMBER: "For how long a period will the requirements of the 
Navy be covered by this Bill?" 

ADMIRALTY REPLY: "No definite answer can be returned to that 
question. The programme now before you is the minimum consist- 
ent with our needs to the end of 1924. It is not considered wholly 
adequate by the Imperial Navy Department, especially as regards 
the number of cruisers and submarines, these being types to which 
special importance is attached. Developments in the naval policy 
of foreign States cannot be ignored by us." 

A MEMBER : "Does this programme take cognisance of current naval 
expenditure in the United States and England?" 

ADMIRALTY REPLY: "Yes, it was not prepared until the extent of 
current naval expenditure by those two Powers was known to us. 
Any substantial additions which may be made by either of them 
would compel us to reconsider our own Budget." 

A MEMBER: "Are we, then, building warships against the United 
States or England, or both?" 

ADMIRALTY REPLY: "No; against neither. The Navy Department 
deprecates such suggestions. But it is obvious that our own pro- 
gramme must be influenced by what is being done abroad." 

A MEMBER : "The political outlook must indeed be grave if the Navy 
Department feels warranted in demanding 68,000,000 for new 
warships at a time of such pronounced economic stress. The Com- 

74 The figures are taken from the Financial and Economic Journal of Japan f 
1910 and 1926, issued by the Japanese Department of Finance. 

75 Interview at Superior, Wisconsin. New York World, August 11, 1928. 
70 Sea Power in the Pacific, p. 155. 


mittee would welcome a more detailed explanation of the Depart- 
ment's reasons for this heavy demand." 

ADMIRALTY REPLY : "The programme is dictated by requirements of 
strategy. It was not drawn up without earnest consideration or 
without due allowance being made for the country's financial 
situation. Every nation must, however, be prepared to make sacri- 
fices if it desires to be safe from foreign aggression." 

The meteoric rise of these expenditures in turn caused uneasiness 
in the United States over the Pacific possessions acquired in the 
name of security. The United States was beginning to feel less se- 
cure than before, and this in spite of the fact that it had extended 
the range of safety from its own Pacific coast to the Philippines, a 
distance of over six thousand miles. A Four Power Pacific Pact 
and a naval limitation and non-fortification agreement had to be 
entered into in order to check the naval competition between the 
two nations and instil a sense of security in both. 

The lesson of the Rush-Bagot Agreement of 1817, 77 establish- 
ing "security" between the United States and Canada is the locus 
classicus in the history of security. The spirit of this agreement 
has intensified the like-mindedness of the two nations in the keep- 
ing of peace and assisted the development of the relation signs 
of international civilization. The Rush-Bagot Agreement was es- 
sentially a renunciation of war as an instrument of national 
policy, and has provided ever since a means of escape from com- 
petitive arming of the two nations, not only on the Great Lakes 
and the St. Lawrence River the extent of the boundary at that 
time but along the entire stretch of three thousand miles of their 
common frontier. In 1911 the United States and Canada imple- 
mented the Rush-Bagot Agreement by establishing an Interna- 

77 "The naval force to be maintained upon the American lakes by His Majesty 
and the Government of the United States shall henceforth be confined to the fol- 
lowing vessels on each side, that is 

On Lake Ontario, to one vessel not exceeding one hundred tons burden, and 
armed with one eighteen pound cannon. 

On the Upper Lakes, to two vessels not exceeding like burden each, and armed 
with like force. 

On the waters of Lake Champlain, to one vessel not exceeding like burden, and 
armed with like force. 

All other armed vessels on these lakes shall forthwith be dismantled, and no 
other vessels of war shall be there built or armed." Malloy's Treaties, I, 630. 


tional Joint Commission to deal with all disputes which may arise. 
In the twenty-three cases referred to it during its eighteen years 
of existence, the Commission has been unanimous in its recom- 
mendations in every case but two, and every award has been ac- 

The launching of a cruiser in the Brooklyn Navy Yard, the lay- 
ing of a keel for a new aircraft carrier in Norfolk, the Congres- 
sional approval of the War Department's expenditures running 
into hundreds of millions have no disturbing repercussion in 
Canada. The spirit of the Rush-Bagot Agreement has become a 

The Peace Time Function of Armaments. 

To carry on war is not the sole raison d'etre of large arma- 
ments ; they play their role, a subtler one, in time of peace also. 
Armaments are the most important instruments possessed by the 
state for enforcing its policy on other states. To understand this 
function of armaments is to understand much of the spirit that 
pervades disarmament conferences, and why success in an absolute 
sense is so difficult to obtain. 

It is not so much actually in order to shoot her guns at England 
that America wants cruisers ; nor to defend her supplies from Ameri- 
can cruisers that England is so particular about her superiority at 
sea. It is because naval preeminence means international prestige; 
preponderance in the counsels of the world; authority in troubled 
areas such as China ; power to have one's way ; political backing to 
financial economic and commercial penetration. 78 

In time of peace the true head of the army and navy is not the 
minister of national defense, as he is sometimes euphemistically 
labeled, nor the minister of marine, but the foreign secretary. 
When the British battleships in the Mediterranean set sail for 
Alexandria pursuant to an ultimatum to the Egyptian Govern- 
ment demanding the withdrawal of the Public Assemblies Bill 
from the Egyptian Parliament before 7 :00 P.M. on May 2, 1928, 
it was Sir Austen Chamberlain, the British Foreign Secretary, 
and not Mr. Bridgeman, the First Lord of the Admiralty, who was 

TS Madariaga, op. cit., p. 231. 


directing the course of the fleet. Nor is the British Foreign Secre- 
tary to be regarded as unique in this role. The United States Sec- 
retary of State has on several occasions directed the military and 
naval wing of American diplomacy to the Caribbean region. On 
February 20, 1927, "acting under authorization of the State De- 
partment, Admiral Latimer landed forces from the [cruisers] 
Milwaukee, Raleigh, and Galveston in Managua," 79 a seaport 
town in Nicaragua. The marines were sent ostensibly for the pur- 
pose of protecting American lives and property ; but those sent in 
January, 1928, were there largely for the purpose of running 
down Sandino and his small body of followers who took to the 
northern jungle. The act of sending these marines was, therefore, 
not simply military or protective, but the expression of a policy of 
state such as Madariaga describes : 

The stronger his military and naval wings, the easier his task, the 
less he has to water down truth, the higher can his reputation soar. 
A war, i.e., a fit of hostilities in the permanent world war, occurs 
when the foreign secretary has to own up a failure, and to hand over 
the army and navy to generals and admirals. 80 

In the same vein was the address of M. Leygues, French Minis- 
ter of Marine at Brest, November 14, 1929. 

Legitimate use of sea power and strength upon the seas is essential 
for real greatness in a country. Eras of economic prosperity and 
political power always coincide in a nation's history with periods of 
naval prosperity. In order to be a world power in the broadest sense, 
a country must be a great naval power. In the natural order of 
things, each nation must have its share of warships in proportion to 
its power, the number of its ports and the length of its coast-line. 
That was the formula of Colbert, the great minister of Louis XIV, 
and it is our policy today. 81 

Colbert's nationalism was more rampant, for he also believed that 
the prosperity of a neighbor was a danger, and that a truly great 
France would be one in which all its rivals would be paupers ; M. 
Leygues 5 address did not refer to that part of Colbert's views 

Department Release of February 21, 1927; see also Survey, 1929, p. 


so Madariaga, op. cit., p. 59. si New York Times, November 15, 1929. 


which might have stimulated his audience to some reflections out 
of line with his own teaching. 

The Franco-Italian controversy over naval equality which 
dates back to the Washington Conference is, to a large degree, a 
matter of prestige. With the present French navy aggregating 
550,000 tons as against Italy's 260,000, equality of prestige can 
be attained in one of two ways: (a) either Italy must build up to 
the French level, or (b) France must cut down to Italy's level. 
M. Briand has proposed a third, the formula characterized by the 
phrase chiffres de prestige under which all of the great naval 
Powers would be given the "theoretical" right to maintain 
equality of tonnage in auxiliary craft, at the same time agreeing 
not to build more than a specified portion of this tonnage. The 
embarrassment and the irritation which France suffered at the 
Washington Conference as a result of the Italian demand for 
equality and its willingness to go as low as the French was to be 
avoided at a future disarmament conference by this contrivance 
of chiffres de prestige. At M. Briand's suggestion, the idea was 
incorporated in the still-born Anglo-French Naval Compromise. 

Armaments give "station" to nations in the international com- 
munity. The larger the armament the higher the station. This 
prestige is an immaterial substance, highly valued, not capable of 
adequate statement; when called national honor, it moves in the 
realm of magic and is exposed to injury wherever it is found. 


Capital Ships and Aircraft Carriers. 

The Washington Treaty of 1922, signed and ratified by Great 
Britain, the United States, Japan, France, and Italy, put an end 
to the menacing and costly competition in capital ships. At pres- 
ent no capital ships are being built, are appropriated for or au- 
thorized by any of the signatories to the Washington Treaty. 1 
Had the competition not been checked, the United States, ceteris 
paribus, would have achieved primacy as a naval Power, displac- 
ing England which has held the trident since the days of the 
Spanish Armada. Mr. Green of Iowa, Chairman of the Ways 

i United States Navy, Office of Naval Intelligence, December 11, 1929. 



and Means Committee of the House, stated that had the United 
States carried out its naval program existing at the time of the 
Washington Conference, "our navy expenditures, at a moderate 
calculation, would have doubled annually." He estimated that the 
limitation on capital ships will have saved for the American 
people at least $3,000,000,000 when the ten-year period is up. 
The comparative strength of the five signatory Powers in capi- 
tal ships and aircraft carriers within the effective age of twenty 
years in December, 1929, was: 2 


Capital Ships 
Aircraft Carriers 


Built Building Authorized Total 

No. Tons No. Tons No. Tons No. Tons 

18 525,850 (a) 18 525,850 

3 76,286 1 13,800 4 90,086 


Built Building Authorized Total 










Capital Ships 







Aircraft Carriers 





















Capital Ships 







Aircraft Carriers 





















Capital Ships 





Aircraft Carriers 





















Capital Ships 




Aircraft Carriers 





(a) The United States and British Empire under the Washington Treaty were 
each permitted to lay down and complete five capital ships of a maximum of 175,- 
000 tons prior to December 31, 1936; Japan, three capital ships of a maximum of 
105,000 tons prior to that date. 

2 Data taken from British Admiralty Blue Book, Cmd. 3464, 1930, and United 
States Naval Intelligence, December 9, 1929. 


Great Britain was given a margin of superiority over the 
United States in battleship strength to offset the relatively greater 
obsolescence of its capital ships. In aircraft carriers, Great Brit- 
ain has a considerable margin of tonnage over that of the United 
States, notwithstanding the fact that the Washington Treaty al- 
lotted 135,000 tons to each. The reasons for this disparity are 
due in the main to the experimenting which is still going on with 
this type of craft and the enormous cost 3 which the controllers of 
the national purse are reluctant to indulge in. Italy, although 
accorded the same capital ship tonnage as France, had made no 
attempt prior to 1930 to achieve equality ; in capital ships France 
in 1929 had more than twice the number and tonnage of its Medi- 
terranean rival. 

Auxiliary Craft. 

The American Government's proposal at the Washington Con- 
ference to extend the 5:5:3:1.75:1.75 ratio to cruisers, de- 
stroyers, and submarines was blocked by the refusal of the French 
Government to accept the submarine tonnage quota of 30,000 
allotted to it under the Hughes plan. France's submarine strength 
at the time of the Conference was between 30,000 and 40,000, 
built, building, and projected. To compensate for its low position 
in battleship strength, France demanded a minimum of 90,000 
tons of submarines, i.e., parity in this department with Great 
Britain and the United States. Great Britain declared that unless 
submarines were limited, it would not accept the auxiliary surface 
craft ratio which in reality constituted a potential antidote to the 
submarine. The Conference took the line of least resistance; 
rather than wreck the work that had already been accomplished in 
connection with the limitation of capital ships, it abandoned the 
numerical restriction of auxiliary craft. 

The following tables indicate the number and tonnage of com- 
batant ships within the effective age of twenty years for cruisers, 
sixteen years for destroyers, and thirteen years for submarines 
whose numbers were not affected by the Washington Treaty : 

s The aircraft carriers Lexington and Saratoga cost $46,000,000 apiece. Each 
ship has a landing area of five acres, and can carry seventy-two planes. 
















Built Building Authorized 

No. Tons No. 

11 80,500 12 

284 290,304 

108 77,062 2 

Tons No. 

120,000 10 


5,520 3 

Tons No. Tons 
100,000 33 300,500 
(b) 284 290,304 
4,650 113 87,232 

Built Building Authorized 

No. Tons No. 

53 321,991 6 

153 159,280 20 

51 42,061 12 





No. Tons No. Tons 

3 23,000 62 401,791 

9 12,160 182 198,400 

6 9,420 69 73,341 


Built Building Authorized Total 

No. Tons No. Tons No. Tons No. Tons 

29 166,815 4 40,000 ........ 33 206,815 

101 105,575 
61 61,357 

6 10,200 
6 10,220 


No. Tons 

No. Tons 

15 136,285 
59 65,912 
43 34,845 

4 36,600 
17 35,082 
36 42,811 


No. Tons 

No. Tons 

14 90,243 
71 62,256 
38 20,478 

4 20,000 
14 21,100 
15 12,247 


13,600 115 129,375 
6,290 71 77,867 

Authorized Total 

No. Tons No. Tons 

1 10,000 20 182,885 

6 14,172 82 115,166 

11 12,442 90 90,098 

Authorized Total 

No. Tons No. Tons 

6 50,000 24 160,243 




(b) In addition twelve destroyers were authorized by Act of Congress, August 
29, 1916, but no funds have been authorized for their construction. 

(c) Includes Surrey and Nor thumb erland f the construction of which has been 


According to these figures Great Britain has nearly twice as 
many cruisers as the United States. The Admiralty Blue Book* for 
1929 credits the United States with a total of forty-five cruisers ; 

* Cmd. 3464, 1930. 


but vessels within the effective age of twenty years are the only 
ones included in the Navy Department's statistics, and the Ameri- 
can figures in the above table show but thirty-three such vessels. 
Regarding twelve American cruisers as obsolete or obsolescent, 
the navy refuses to include them under the heading of "first line" 
vessels; of the forty-five American cruisers listed in the Admiralty 
Blue Book, nineteen were completed before 1909 and three of 
these before 1900. But age is by no means the only criterion of 
measurement; the factors of size, speed, armor, and gun caliber 
determine the effectiveness of a vessel in combat, and to the naval 
experts these are more important than age. 

Obviously sixty-two small cruisers can protect or destroy more 
commerce than can thirty -three large cruisers ; on the other hand 
in combat strength a group of large cruisers may be equal or 
even superior to a group of small cruisers which is larger in num- 
ber of units and in tonnage. 

Destroyer Types. 

The United States has more destroyers than Great Britain and 
Japan combined. 5 This type of vessel has proved itself indispen- 
sable to a modern fleet. Although it cannot perform the duties of 
a cruiser of larger tonnage destroyers generally range from 
800 to 1,500 tons it is, as its name implies, a powerful instru- 
ment of offense against submarines. 

No other class of vessel was more directly responsible for the pro- 
tection of sea traffic in the Great War. . . . The universal apprecia- 
tion of the destroyer as the surest antidote to the submarine menace 
is attested by the enormous number of these boats constructed dur- 
ing the war in Great Britain and the United States. Thrice-armed 
with ram, gun, and depth-charge, and able to pursue its prey at a 
speed of 40 miles an hour, the destroyer is, and promises always to 
remain, the submarine's deadliest foe. 6 


The submarine is the weapon of the small and relatively poor 
naval Power; seven submarines of the V-type the largest and 

s United States Navy, Office of Naval Intelligence, December 11, 1929. 
6 Bywater, op. cit. f p. 57. 


costliest type of the American submarine fleet can be built with 
the money expended on the construction of one battleship. It 
nearly wrecked the Washington Conference of 192122, and in a 
sense it did wreck the Three Power Naval Conference at Geneva 
in 1927. French determination to have 90,000 tons of submarines 
led Great Britain to reject the extension of the 5:5:3 ratio to 
cruisers in 1921, and the British insistence upon more cruisers at 
Geneva in 1927 was prompted by increasing French activity in 
submarine construction. 7 This fact was not fully grasped by the 
American delegation at Geneva which saw only the United States 
as the target of British cruisers. The submarine is an effective in- 
strument for endangering the security of the British Empire 
along the vital routes which lie within the reach of the most for- 
midable submarine power in Europe. 

While Great Britain uses the language of cruisers to defend its 
trade routes and communications, France uses that of submarines 
for military reasons. Morocco, Algiers, and Tunis are reservoirs 
of French man power. With English control of the Mediterranean 
cutting "Greater France" in two, the security of French surface 
communication is at the mercy of the British fleet, and a large 
submarine fleet is thought desirable to assure surface transport 
between France and its African colonies. When its present sub- 
marine program is completed, France will have ninety submarines 
totaling 90,098 tons as against Great Britain's sixty-nine sub- 
marines totaling 72,521 tons. 

France would not at Washington accept for submarines the 
ratio allotted to it for capital ships. It accepted the capital ship 
ratio because (a) it was required to scrap nothing; (b) neither on 
the French coasts nor on the Mediterranean could its main fleet 
resist the British; (c) its existing capital ship tonnage of 221,170 
contained a number of old ships and it suffered nothing in having 
a replacement tonnage of 175,000; (d) it obtained the right to 
lay down new tonnage in 1927, 1929, and 1931, on the theory that 
it had not built since 1915, but really as a compromise. The ratio 
of 5:5:3:1.75:1.75 was an expedient based mainly on the gen- 

7 In 1922, France had 1,000 tons of submarines under construction; in 1927, 
25,000 tons. 


eral fleet power at the time it was proposed. There is no logical 
reason why it should be applied to submarine tonnage which the 
French argue must be based on their special needs. 

The Anglo-American acceptance of "parity" as a guiding 
principle is rejected by France as an example for itself and Italy. 
As between the United States and Great Britain, the actual differ- 
ence of strength is about 10 per cent ; as between France and Italy 
it approaches 50 per cent of French strength in every class. The 
French believe that the difference represents a difference in needs : 
they have ports to defend on the Channel, the Atlantic, and the 
Mediterranean; they own enormous areas in northern, western, 
and equatorial Africa; Madagascar is as large as England and 
Wales together and has a population of over three and a quarter 
million ; in the American hemisphere are French Guiana and three 
of the Lesser Antilles ; in the Orient are Indo-China with an area 
of 300,000 square miles and 20,000,000 people, besides some small 
islands ; and there are the important mandates of Syria and the 
Cameroons. Against such responsibilities Italy can show only its 
own coast line, the Dodecanese, and Libya, Eritrea, and Somali- 
land in Africa. 

The latest French estimate of the relative naval requirements of 
the five Powers, based on purely practical grounds, is contained in 
a report which has been submitted to the Navy Committee of the 
French Senate. The needs of Italy are taken as the unit, and "co- 
efficients of defense" are calculated in various factors as follows : 

Area of Length Length of 

Territory of Coasts Communications 

British Empire 16.8 9.5 112 

United States 4. 4.6 3 2 

Japan 0.3 3. 1 

Italy 1. 1. 1 

France 4.7 2.3 68 

For external trade and sea-borne traffic, the figures are as fol- 

External Trade Sea-borne Traffic 

British Empire 10.6 17.8 

United States 5.3 7.6 

Japan 1.3 2.3 

Italy 1. 1. 

France 2.7 3.6 


In this fashion France estimated its naval needs as larger than 
those of Japan, about half those of the United States and much 
larger than those of Italy, though only one-fifth those of Great 
Britain. Ignoring political realities, the calculation presents fac- 
tors which are thought by the French 8 to justify an out-and-out 
refusal of Italian parity. 9 

8 London Times, December 6, 1929. 

9 The treatment of the London Naval Conference of 1930, according to the plan 
of the Surveys, will appear in the Survey for 1931. 


THE uncircumscribed phraseology of the Pact of Paris 
evolved in the United States several types of thought con- 
cerning its future application. Persons of sanguine temperament 
saw in the simple fact of renunciation by fifty-eight nations 1 of 
"war as an instrument of national policy" a new evangel, creat- 
ing a new era in which the regeneration of men's hearts would 
abate the nationalistic pretenses of states and statesmen and 
bring about universal peace. The fervent desire of the masses 
for peace would, these apostles of war "outlawry" believed, sur- 
mount the popular antipathies and the enthusiasms for "rights," 
"interests," and "policies" which create the will to war, and 
would somehow fuse and resolve away spontaneously those issues 
and causes of controversy which in the past have too often found 
in war their sole arbitrament. Regeneration would come by grace 
under the inspiration of the "word." 

A second group represented the school of American thought 
which finds American security to consist of a voluntary absten- 
tion, as complete as possible, from external relationships which 
carry either explicit responsibility for action or the implication 
that action will be taken under pressure of circumstances. To 
this group there were two dangers in the Pact of Paris ; one was 
the possibility that the Pact might be interpreted to restrain the 
United States from declaring war in the case of an infringement 
of the Monroe Doctrine, or from asserting some of the rights of 
"neutrality" or the "open door" policy. The indispensable and 
therefore implied right of "self-defense," naturally interpreted 
as defense of the national domain, would not protect these 
intangibles, which might be important for the national welfare 
even if they did not involve its security. Apprehension on this 
score was quieted by repeated assurances from Secretary Kellogg 
that each nation would be as free after the Pact as before to make 
war in self-defense, and to construe "self-defense" for itself, i.e., 

i As of July 1, 1930. 


in its own interest; war in self-defense would permit of war in 
defense of a "right" or "interest," even though it might be diffi- 
cult in the concrete to distinguish an intangible "right" or "in- 
terest" from the national "policy" which would no longer be a 
legitimate basis for war. 2 The Committee on Foreign Relations, 
by declaring in its report that the Monroe Doctrine is an interest 
of the United States, the maintenance of which is an act of self- 
defense, 8 gave notice, to the national constituency at least, that 
the Monroe Doctrine is a paramount interest of the United 
States, the infringement of which (adjudicated by American 
opinion alone) would warrant a declaration of war by the United 
States and that such a declaration would not constitute a breach 
of the Pact. 

The second danger apprehended by the so-called "isolationist" 
school was that by signing the Pact the United States might be 
accepting some responsibility for future action against a recal- 
citrant state, whether in the form of military action to avert or 
stop hostilities, or of conference with other signatories and the 
concerting of diplomatic demarches which might be effective 
without resort to more vigorous policing measures ; but any defi- 
nite obligation in this regard was emphatically dismissed by Sec- 
retary Kellogg, whose immediate concern was to conciliate doubt- 
ing senators. 4 

A third view was maintained by those persons who thought 
that in the event of the beginning of hostilities between other na- 
tions leadership or action of some sort by the United States would 
be desirable, that its nature would have to be opportunistic and 
that the tendency of the United States to express an interest in 
the keeping of the peace would help to deter a nation from making 

2 For the communications between the Secretary of State and the Committee 
on Foreign Relations of the Senate on this point, see the Survey, 1929, p. 4-05. 

s Senator Borah's report to the Senate stated that in the Pact of Paris the 
"right of self-defense is in no way curtailed or impaired." 

"The United States regards the Monroe Doctrine as a part of its national 
security and defense. Under the right of self-defense allowed by the treaty must 
necessarily be included the right to maintain the Monroe Doctrine which is a 
part of our system of national defense." Congressional Record, I, XX, Part 2, p. 

* Survey, 1929, p. 407. 


the aggressive war envisaged by the Pact. To such persons it 
was inconsequential whether any move by the United States at a 
given juncture was or was not ascribed to the Pact, was or was 
not an "implementation" of it. The hesitation of international 
diplomatists to make suggestions of peace to belligerents for 
fear that the interposition might be resented by the belligerent 
holding the upper hand has disappeared before the reasonable 
certainty that modern war will engulf many states which desire to 
preserve their neutrality. The immediate interest of each nation 
in the preservation of peace, an innovation in formal diplomacy, 
was recognized in Article 19 of the Covenant which authorizes the 
Assembly from time to time to "advise the reconsideration by 
Members of the League of treaties which have become inapplicable 
and the consideration of international conditions whose continu- 
ance might endanger the peace of the world." 

With this attitude it seems proper to identify Senator Borah, 
chairman of the Senate Committee on Foreign Relations. To the 
question, What will be the position and the action of the United 
States in case some nation violates the treaty? Will it simply be 
that of indifference? his reply was: 

Of course the United States would not be indifferent. It would be 
interested in keeping the treaty alive. In case of a violation or in 
case it was claimed there was a violation, the United States would 
determine for itself whether there had been a violation. 5 If it con- 
cludes the treaty had been broken, the United States would be en- 
tirely free as to its future course. It would then be in the same posi- 
tion and enjoy the same freedom of action as if the treaty had 
never been written. I would assume, however, that being interested 
in the cause of peace it would pursue such course through peaceful 
means as would best serve the cause of peace and maintain the 
treaty. 6 

A more forthright policy was attributed to him by the follow- 

American foreign policy is often most easily comprehended by 

It will be noted that the Senator differed on this point from Secretary 
Kellogg, who asserted (see the Survey, 1929, p. 405) that each nation could con- 
strue the expression "self-defense" in its own case. 

e Congressional Record, January 7, 1929, p. 1281. 


reference to the ideas of the mid-victorians in England. John Bright 
denounced the conception of the balance of power in Europe much 
as Senator Borah has attacked the League of Nations but the 
motive in both cases was a keen desire to see the peace preserved. 

The American policy in the new proposals that it has just put 
forward is one that might well recommend itself to a Morleyite Eng- 
lish liberal. It holds that the moral sanctions of peace are the 
strongest and renounces war as an instrument of policy in interna- 
tional relations. But if war breaks out the proposals do not neces- 
sarily commit the signatory powers to mere passive isolation from 
the struggle. On the contrary the powers which have signed the 
American treaty may proceed to do what America did in the late 
war and use their influence for justice and peace in the way they 
think best. 7 

And by causing the article containing these passages to be 
printed in the Congressional Record* without a disavowal Sena- 
tor Borah would seem to have accepted the imputation. 

It would be logical and politically expedient for any Ameri- 
can administration to connect measures inspired by this post- 
war view of the family of nations with a Pact which had met with 
the overwhelming favor of the American people, and this was the 
line adopted by Mr. Hoover as it became incumbent on his ad- 
ministration to take decisions in matters of high foreign policy. 
"It has been my cherished hope," he said in his Armistice Day 
speech, "to organize positively the foreign relations of the United 
States on this high foundation." He declared that since the re- 
quirements of the Pact were dynamic, the United States must be 
interested in seeing that other nations besides itself "shall settle 
by pacific means the controversies between them." 

Even before this general declaration by Mr. Hoover, this 
policy of the administration had been expressed by the activity 
of the State Department in the Russo-Chinese dispute over the 
Chinese Eastern Railway. Inaction in the face of the dangers 
threatened by the controversy would have tended, in the judg- 
ment of the administration, to stultify the Pact of Paris and the 
hopes it had raised in the hearts of Americans. As Mr. Stimson 
explained toward the close of the controversy, "If the recent 

7 Saturday Review, London, April 21, 1928. 8 May 7, 1928, pp. 7963 ff. 



events in Manchuria are allowed to pass without notice or pro- 
tests, the intelligent strength of the public opinion of the world 
in support of peace cannot but be impaired." 9 




A brief statement concerning the Chinese Eastern Railway is 
necessary to an understanding of the acts of the United States 
and of other Powers in relation to the Russo-Chinese dispute. 
The line of the present Chinese Eastern Railway, approximately 
a thousand miles long, was built between 1897 and 1903 at the 
extraordinarily high cost, as given in the Statistical Year Book of 
the Chinese Eastern Railway for 1929, of 397,663,314 gold 
rubles, or about $200,000,000. 10 For Russia the line reduced the 
railroading distance from any Russian point west of Manchuria 

9 Press Releases, issued by the Department of State, December 7, 1929. 

10 In addition, the Czarist government paid deficits of the road from 1903 to 
1914 amounting to 178,479,617 gold rubles. 


to Vladivostok by 568 miles. For China the line afforded a develop- 
ment of the fertile but largely unpopulated North Manchurian 
territory ; more important for China was the fact that the conces- 
sion for building the line was part of a secret agreement for the 
military protection of China by Russia in the event of further 
aggression by Japan after the Sino-Japanese war of 1895. The 
project was camouflaged by the incorporation in Russia of a 
private joint-stock company called the Russo-Chinese Bank, 11 to 
receive the concession. The Chinese Government was to contribute 
five million taels to the capital of the bank and to have propor- 
tionate interest in the profits and losses of the bank. 12 The bank, 
in which there was a considerable French share-holding interest, 
in turn formed a railway company, the Chinese Eastern Rail- 
way, and transferred to it the concession for the line. Both bank 
and railway were obviously agencies of the Russian Government. 
The gauge fixed was the five-foot gauge of the Russian rail- 
ways. 13 At the end of eighty years the line was to revert to the 
Chinese Government without charge; after thirty-six years 
China might purchase or redeem the line upon repaying in full 
all the capital involved as well as all the debts contracted for it, 
plus accrued interest. The president of the company was to be a 
nominee of the Chinese Government. 

The share capital of the Chinese Eastern Railway seems all to 
have passed into and to have been held by the Russo-Chinese 
(Russo- Asiatic) Bank. The road was built from the proceeds of 
a bond issue made by the railway company. Interest and prin- 
cipal were guaranteed by the Russian Government which paid 
the early deficits out of the Ministry of Finances. French banks, 
with some Belgian participation, took the larger part of these 

11 The name was later changed to the Russo-Asiatic Bank. 

12 Obviously another term of the proportion needs to be known to determine 
the Chinese share. That was to be fixed by the terms of a "special contract," 
which seems never to have been made public. The total capital of the bank, 
which began at six million rubles, rose eventually to fifty-five million rubles. 
Some authorities, including Gerard, in Ma Mission en Chine, allege that the 
Chinese Government never paid in the five million taels, but Weigh, in RUJSO- 
Chinese Diplomacy, p. 72, states that that amount "seems to have been paid out of 
the Russo-French loan to China after the conclusion of the Sino-Japanese War." 

13 All other main lines in Manchuria are of standard gauge. 


bonds and the remainder appear to have been held in the Ministry 
of Finances. On the completion of the line a sum of five million 
taels was to be paid to the Chinese Government, but this still 
remains unpaid. 14 

On account of the chaotic political conditions in Eastern Si- 
beria ^hich followed the collapse of the Czarist government in 
1917 and with the particular aim of bringing out of Siberia a 
force of Czechoslovaks who were interned there during the World 
War, and in order to prevent the capture by the Bolshevists of 
the enormous quantity of military stores at Vladivostok which 
the Allies were supplying to Russia through that port, the Allies 
in 1919 organized an expedition into Siberia and in connection 
with it created an Interallied Commission to control the operation 
of the Chinese Eastern Railway. Under this regime supplies for 
the line were furnished in part by Japan, approximately 
$5,000,000 in goods, and in part by the United States, approxi- 
mately the same amount in cash. 

On the American withdrawal from Manchuria and Siberia in 
1920 the Russo- Asiatic Bank, which had been reorganized under 
French auspices when the Bolshevists came into power, made a 
provisional agreement with the Chinese Government permitting 
China, in view of the political disorganization of Russia, to take 
over "supreme control" of the railway pending the conclusion of 
an arrangement with a Russian government recognized by China. 
The bank at this time acknowledged that the ownership of the 
line belonged to "a lawful Government" of Russia. 

At the Washington Conference the question of this line was 
raised, but Russia was not present and China objected to the 
exercise of foreign control. The conferring powers other than 
China adopted a resolution reserving the right to insist upon the 
responsibility of China as trustee for the stockholders, bond- 
holders, and creditors of the Chinese Eastern Railway, i.e., in the 
interest of the French advances for building the line and the 
American and Japanese advances of $10,000,000 in 1919-22. 

In 1924 the Chinese Republic and the Union of Soviet Social- 

14 Hawkling Yen at the Washington Conference, W. W. Willoughby, China at 
the Conference, p. 229. 


1st Republics came together on all outstanding issues, among 
which the question of the Chinese Eastern Railway figured 
largely. The agreements made were provisional, and were never 
implemented. Two were made on May 81, 1924, between the 
Peking and Soviet governments. Russia was to take the respon- 
sibility for the claims of the shareholders, bondholders, and 
creditors of the Chinese Eastern Railway. China was to be al- 
lowed to redeem the line on terms to be settled at a future con- 
ference. The board of directors was to consist of five Chinese and 
five Russians; decisions of the board were to be by majority 
agreement. A Chinese was to be president of the board, Russians 
were to hold the offices of vice-president and manager, a Chinese 
and a Russian were to be assistant managers with duties to be 
defined thereafter by the board of directors, and the personnel 
was to be equally allocated between Chinese and Russian na- 
tionals. Article 8 of one of the agreements provided: "All the 
net profits of the Railway shall be held by the board of directors 
and shall not be used pending a final settlement of the present 
question." Certain clauses prohibited propaganda by either gov- 
ernment directed against the other's political or social system. 
On account of the quasi-independence from Peking of the Muk- 
den government under Marshal Chang Tso-lin, Russia found it 
expedient to negotiate a separate agreement with the Mukden au- 
thorities to the same general effect as that with the Peking gov- 
ernment. These agreements were protested by the Russo- Asiatic 
Bank on account of the rights of the railway's shareholders and 
bondholders, and by the United States and Japan on account of 
their advances to the line while it was under Interallied control. 
By these agreements China settled, in the main advanta- 
geously to itself, all outstanding difficulties with Russia. This was 
a relief to China, which was drawing away from the occidental 
powers and was on the point of obtaining Russian military and 
political assistance in the organization of nationalism and in giv- 
ing supremacy to the Kuomintang party. Russia obviously 
benefited by regaining, through the medium of an explicit rec- 
ognition by China, a half-interest in the line. Both countries 
jointly got rid of the French interests. Russia, it is true, assumed 


responsibility "for the entire claims of the shareholders, bond- 
holders, and creditors of the Chinese Eastern Railway incurred 
prior to the revolution of March 9, 1917." (This omitted the 
$10,000,000 of American and Japanese claims of 1919-22.) 
But the vagueness of Article VIII of the agreement as to the use 
of the "net profits" of the railway offered little hope to French 
claimants, and in fact the revenues 15 of the line were deposited 
in a Russian bank in Harbin and part of them thence transferred 
to Moscow at the pleasure of the Russian authorities, until in- 
creasing Chinese insistence forced in 1927 a division between 
Russian and Chinese banks. The agreement purported to relieve 
China of a responsibility to foreign interests which it had already 
recognized in the agreement with the Russo-Asiatic Bank of 
1920, and left that responsibility with Russia which had already 
repudiated all such obligations at the outset of the revolution. 

As early as 1923 Chang Tso-lin inaugurated a program of 
persistent effort to enlarge his share of control of the railway. 
First he tried to take over the land offices ; later, after the signa- 
ture of the 1924 treaty, he succeeded in taking over the education 
department ; he commandeered the fleet of Sungari river steamers 
belonging to the Chinese Eastern Railway, and forced the man- 
agement to deposit part of the railway receipts in a Mukden 
bank controlled by the Mukden government. The Russian and 
Mukden governments quarreled violently as to whether the line 
should continue to carry Chinese troops on credit, a practice 
which by 1925 had brought the Mukden government into debt 
to the railway to an amount between $11,000,000 and $14,000,- 
000. This brought a countercharge from the Chinese to the 
effect that the Russian manager was extravagant and careless, 
that he issued large numbers of free passes to Communist agents 
and even used funds of the road for propaganda purposes, that 
he increased the number of Russian employees, and that he 
bought supplies from Russian firms at extortionate prices. 

Both the Nanking and Mukden governments were in favor of 

is That there are revenues for division must be due in some degree to the fact 
that no payments are made to "the shareholders, bondholders, and creditors" with 
whose capital the road was built. 


taking entire control of the road, the latter government especially 
acting under the impetus of the new Manchurian bourgeoisie, 
nationalistic and eager for the rewards of control. Under this in- 
ducement Chinese police on May 27, 1929, raided the Soviet con- 
sulates in Harbin and Mukden, where they alleged Communist 
propaganda was being promoted, and on July 10 and 11 the 
Chinese president of the road dismissed Emshanoff, the Russian 
manager, the five Russian members of the board of directors, and 
the Russian heads of departments, explaining that this step was 
necessary to frustrate Communist propaganda and "to safe- 
guard China's interests in the Chinese Eastern Railway." After 
an exchange of recriminatory notes, the Russian Government on 
July 18 broke off diplomatic relations and closed the border to 
railway communication; thereupon a concentration of troops 
took place on each side of the frontier at Manchouli, Chinese 
Suifenho (adjoining Russian Pogranitchnaya) and Blagovest- 

Statements by Chinese officials gave some ground for the be- 
lief that the Chinese demarche was part of China's general pro- 
gram of taking into its own hands the special treaty privileges 
held by foreigners. "There is nothing unusual," said President 
Chiang Kai-shek, "in the measures designed to bring the Chinese 
Eastern Railway into our hands. We first want to take over the 
railway and then take up the discussion of other questions." 16 

A Russian ultimatum was followed by a Chinese manifesto. 
Each government called the Pact of Paris to its aid. In its mani- 
festo the Nanking government declared that China, while imbued 
with the spirit of the Pact of Paris, was prepared to take appro- 
priate measures for "self-defense." In an interview on July 19 
Commissar Rudzutak, acting head of the Soviet government, was 
reported as saying at Moscow that the financial interests of the 
Soviet government in the Chinese Eastern Railway were of less 
importance than the observance of the Pact of Paris. On July 22 
the Chinese Government announced that "in the event of Mos- 
cow's deliberate violation of the Kellogg Pact" it would place the 
situation in the hands of the Council of the League "for investi- 

16 Quoted in Soviet Note to China, July 14, 1929. 


gation and settlement," and the Chinese Minister at Washington 
declared that his government would not use force except in self- 
defense. Each side professed a willingness to negotiate, but the 
Chinese basis was the status quo while the Russian was the resto- 
ration of the status quo ante, and this raised the issue of control 
which was the heart of the controversy. 

After holding conversations on July 18 with the diplomatic 
representatives of China, Great Britain, France, and Japan, the 
Secretary of State, Mr. Stimson, announced on July 19 that he 
was seeking cooperation in an effort to avert hostilities between 
China and Russia by calling their attention to the principle of the 
Pact of Paris, signed by them but not yet proclaimed as effective. 
He asked Dr. C. C. Wu, the Chinese Minister, to remind his Gov- 
ernment that China had signed the Pact and that the United 
States and the cooperating powers earnestly desired that China 
and Russia settle their dispute without resort to arms. He also 
sent, through the French Government, a similar reminder to the 

At the same time Secretary Stimson conducted conversations 
with Ambassador Claudel "inquiring into the practicability of 
adding to the Kellogg Pact provisions calling for investigation 
into the merits of the dispute and for a report which would be 
placed before public opinion. 95 Apparently the idea was to begin 
with the Russo-Chinese dispute, though this was not stated at the 
time, and if such were the case, the Stimson proposal failed to elicit 
general approval when it was communicated to the other Powers. 17 

It was said to have won the approval of the French and Italian 
governments, but to have moved London, Tokyo, and Berlin to 
the suggestion that the time was hardly ripe for action, since it 
might be subject to misinterpretation. 18 

The Powers had perhaps too many extraterritorial interests in 
China to indulge in Schadenfreude at Russia's expense. Japan in 
particular, lessee of the Liaotung Peninsula, the South Man- 
churia Railway Company, and other railway concessions, exten- 
sive coal properties, etc., and therefore sensitive about interna- 
tional arrangements concerning Manchuria, is interested in 

17 New York Times, March 12, 1930. is London Times, November 27, 1929. 


keeping any incident there within bounds, and in the clash be- 
tween Russia and China directed its diplomacy to this end. In 
case the dispute had widened Japan would have had to reconsider 
the advisability of open intervention. "It is rather fortunate that 
Nanking was not in a position to force its design on Mukden," 
said a Japanese observer, "for if it had been able to do so a real 
war between China and Russia might have occurred in flagrant 
violation of the Kellogg Treaty and Japan would have had to 
intervene, whether Washington would or not." 19 The part that 
Japan played in the Russo-Chinese trouble is obscure; its real- 
istic diplomacy was presumably at work while the Pact of Paris 
held the stage in international interest. 

No declaration of war was made on either side ; nor did Russia 
attempt to drive down the railway and occupy it to any con- 
siderable length (though this could easily have been accom- 
plished), for it would have been inexpedient, with Japan in the 
offing, to venture on such an entanglement. Instead Russia pre- 
scribed war in small doses. Probably of little seriousness to life 
or property, these attacks ceased after a while ; the Russians were 
waiting for the simmering pot which was brewing a civil war in 
China to boil over. 

The outline of Sino-Russian hostilities became clearer when 
the civil war broke out. Attacks on Chinese Eastern Railway sta- 
tions took place at both junctions with Russian territory and air- 
plane raids were frequent and destructive ; the mines at Dalainor, 
which supply half the Chinese Eastern Railway coal require- 
ments, were put out of commission. The Russian campaign con- 
sisted of striking at border points where the Chinese, especially 
the higher officials, have important financial interests. At Fuchin, 
after driving away the Chinese defenders, the Russian raiders 
took possession of the local bank and of the flour mills, confiscat- 
ing both money and flour. With the money they paid the Chinese 
coolie population to load the flour on a number of river barges 
for transport to Russian territory; the coolies received three 
dollars a day, or about six times the normal rate. When these 
tidings reached the retreating Chinese soldiers a number of them 

10 Dr. S. Washio in the Trans-Pacific (Tokyo), December 12, 1929. 


shed their uniforms and returned to offer their services, which 
were accepted. 20 Both population and defenders cheerfully and 
remuneratively proceeded to help the enemy loot the township. 

Moscow had the military operations well in hand and could 
continue to apply the nutcrackers until the Manchurian authori- 
ties capitulated. The Russian raids were almost continuous; the 
pressure never relaxed, and the Chinese were always either on 
the defensive or in retreat before a severe thrust. Evidence in 
fact accumulated that Mukden wished to give way. Chinese ob- 
stinacy came from Nanking, and, although in China's separatist 
condition this did not affect the local situation, to Russia's long- 
term position in North Manchuria it was embarrassing to have 
an enemy at Nanking because of the diplomatic prestige which 
Nanking enjoyed with the outside world. Chiang Kai-shek had 
also earned the enmity of Moscow for the way he had shorn the 
Nationalists of all their Bolshevist attachments. Now he was 
engaged in a life and death struggle to maintain his power as 
President of the Nanking government. Opposing him were Feng 
Yu-hsiang, a man who in the past had leaned heavily on Bol- 
shevist advice and assistance, and the left wing of the Kuo- 
mintang which had shown itself sympathetic to the aims of the 
Third International. If either or both of these parties emerged 
as victor in the civil war the future of Russia in the Chinese 
Eastern Railway seemed less likely to be challenged. 

This complex of factors accounts for the seemingly fantastic 
way in which Moscow began to take a hand itself in the Chinese 
war as the best way of waging its own. Strategy in Manchuria 
became mixed with diplomacy and confused with other immediate 
objectives. A Russian attack was launched, said the Mukden 
correspondent of the London Times, November 17, "with a view 
to preventing Chang Hsueh-liang (Governor at Mukden) from 
assisting Chiang Kai-shek." The same correspondent is au- 
thority for the statement that Moscow ignored Mukden's offer 
to reopen negotiations, and sent an answer only after it had as- 
sured itself that Manchuria was neutral in the anti-Nanking 
campaign. A show of force was apparently deemed advisable to 

20 New York Times, January 12, 1930. 


persuade the Mukden enemy to remain on the Manchurian front 
as long as there was a possibility that he might be enlisted in sup- 
port of Chiang Kai-shek in China proper. 

In November the Russian forces moved with more persistence. 
The Chinese troops, inferior in numbers and greatly outclassed 
in equipment, training, and discipline, were quickly beaten and 
demoralized, and they fled along the line of the railway, looting 
the Chinese townspeople as they went. 

Negotiations between the Soviet and the Mukden authorities 
then began, on November 27, by an exchange of notes, and a 
tentative understanding was reached on December 3 at Nikolsk 
Ussurisk, north of Vladivostok. "The news from Manchuria," 
commented the Tokyo correspondent of the New York Times , 21 

confirms the Japanese anticipation that the Russians did not intend 
an invasion. The Russians apparently have not occupied any Chi- 
nese towns and are back on their own territory. They have given the 
Chinese a severe slap, humiliated them by disarming 10,000 troops, 
and scared Mukden into a settlement, all by a relatively small opera- 
tion which led to no entanglements. 

To this reverse may be added the reassertion of Russian influence 
on the Chinese Eastern Railway, a net loss in cash of 130 millions 
in defense measures and lost revenues, and considerable damage to 
the railroad, caused more by the Chinese than by the Russians. 22 
The second invocation of the Pact materialized on November 
30. Toward the end of November, according to a statement by 
Mr. Stimson, "organized Russian forces" were in conflict with 
"organized Chinese forces near Dailinor [sometimes rendered 
Dalainor] in Northern Manchuria." 28 The July suggestion had 
been ignored and unofficial accounts stated that the Russians had 
penetrated two hundred miles into Manchurian territory. Again 
Mr. Stimson entered into consultations with the Washington 
representatives of Great Britain, France, Germany, Japan, and 
Italy. As these disclosed a "community of view with regard to the 
fundamental principles," a statement was issued by the United 

21 November 29, 1929. 

22 U.S. Department of Commerce, China Monthly Trade Report, February 1, 

28 Press Releases, December 7, 1929. 


States on November 30 to China and to Russia via France again 
reminding them of their obligations under the Pact of Paris. 
Separate action was this time taken by other signatories. Of the 
five other pillars of the Pact, Great Britain, France, and Italy 
also made representations, while Germany and Japan refrained. 
Thirty-eight other signatories 2 * lent their support to the de- 
marche by individual representations. 

The gist of the Stimson note or statement was as follows : 

On July 18 this Government took steps, through conversations 
between the Secretary of State and the diplomatic representatives 
at Washington of five powers, to see that the attention of the Chi- 
nese and the Russian Governments be called to the provisions of the 
treaty for the renunciation of war, to which both China and Russia 
were signatories. Both the Russian and the Chinese Governments 
then made formal and public assurances that neither would resort 
to war unless attacked. Since that time that treaty has been ratified 
by no less than fifty-five powers, including China and Russia. 

The American Government desires again to call attention to the 
provisions of the treaty for the renunciation of war, particularly to 
Article 2, which reads, "The high contracting parties agree that 
the settlement or solution of all disputes or conflicts of whatever 
nature or of whatever origin they may be, which may arise, among 
them, shall never be sought except by pacific means" ; and the 
American Government takes occasion to express its earnest hope 
that China and Russia will refrain or desist from measures of hos- 
tility and will find it possible in the near future to come to an agree- 
ment between themselves upon a method for resolving by peaceful 
means the issues over which they are at present in controversy. The 
American Government feels that the respect with which China and 
Russia will hereafter be held in the good opinion of the world will 
necessarily in great measure depend upon the way in which they 
carry out these most sacred promises. 

Russia, after protesting its own devotion to the paths of peace 
and the provocative policy of the Chinese Government in viola- 
tion of treaties concluded on the basis of equality a policy 
which culminated in the seizure of the Chinese Eastern Rail- 
way asserted that the United States, Great Britain, and France 

24 As of December 12, 1929. 


under similar circumstances would consider they had "sufficient 
cause for putting into force the reservations they made when 
signing the pact," meaning apparently the right to defend by 
force interests outside home territory. 25 Such reservations, it de- 
clared, have not Russian support. The note then accused the 
Nanking government of having 

mobilized along the Soviet Manchurian Railway an army various 
sections of which, together with counter-revolutionary Russian 
bands included therein, made systematic attacks on the U.S.S.R., 
crossing the frontier and firing on units of the Red Army and 
frontier villages, robbing and violating a peaceful population, caus- 
ing thereby losses of lives and property. 

Despite frequent warnings through the German Government, 
these attacks did not cease, but rather increased and compelled the 
Soviet Far-Eastern army, in the interests of defense, protection of 
the frontier and the peaceful population, to take counter measures. 
Thus the actions of the Red army had due considerations of self- 
defense and were in no wise violations of any obligations of the 
Paris pact. 

That cannot be said of armed forces in Chinese territory and Chi- 
nese ports of those powers who have applied today to the Soviet 
Union with identical declarations. 

The Soviet Government states that the Government of the 
United States has addressed its declaration at a moment when the 
Soviet and Mukden Governments already had agreed to several con- 
ditions and were proceeding with direct negotiations which would 
make possible prompt settlement of the conflict between the Soviet 
Union and China. 

In view of this fact the above declaration can not but be con- 
sidered unjustifiable pressure on the negotiations, and can not 
therefore be taken as a friendly act. 

The Soviet Government states further that the Paris pact does 
not give any single State or group of States the function of pro- 
tector of this pact. The Soviet, at any rate, never expressed consent 
that any States themselves or by mutual consent should take upon 
themselves such a right. 

25 The Hankow incident goes counter to Mr. LitvinofFs charge. In that case 
the British did not use force to defend or to recover their concession interest, 
notwithstanding the Chinese violation of the treaties creating it. 


The Soviet Government declares that the Soviet-Manchurian con- 
flict can be settled only by direct negotiations between the Soviet 
Union and China on the basis of conditions known to China and al- 
ready accepted by the Mukden Government, and that it cannot ad- 
mit interference of any other party in these negotiations or the 

In conclusion, the Soviet Government cannot forbear expressing 
amazement that the Government of the United States, which by its 
own will has no official relations with the Soviet, deems it possible 
to apply to it with advice and counsel. 

Besides the fact that the Russians regarded 26 the application of 
the Pact of Paris to the Chinese Eastern Railway imbroglio as 
a maintenance of the status quo and as depriving them of the 
leverage they had for restoring the status quo ante, so that to 
acknowledge its application would be to accept defeat in token 
of amiability, they seem to have entertained suspicions as to the 
sincerity of the mediating powers. They suspected, first of all, 
that the Powers had in view the establishment of an interna- 
tional commission and the appointment of a neutral director of 
the railroad, 27 creating an international control over the line 
similar to that which the Allies had exercised during the 1919 
22 intervention. This was bound up with the fear that a con- 
sortium of foreign bankers would at some time try to help China 
buy out the Soviet interests, a fear which has long been present 
in Soviet minds. Mr. Karakhan excluded the possibility of for- 
eign financing in the 1924 agreement, which stated that the re- 
demption of the railway could be made only with Chinese capi- 
tal; Moscow, confident that the amount which China would have 
to pay to gain control is beyond the power of China to raise for 
many years to come, feels assured that until the scheduled re- 
version of the Chinese Eastern Railway to China a trans-Siberian 
link with Vladivostok is well insured under Russian control. 

26 For the grounds of the Soviet attitude, see the dispatches of Walter Duranty 
to the New York Times, July-December, 1929, and Louis Fischer, Nation, De- 
cember 25, 1929. 

27 The appointment of a neutral manager whose duties he likened to those of 
a city manager of an American city was one feature of a solution proposed by 
Dr. C. C. Wang, former president of the Chinese Eastern Railway, in Foreign 
Affairs, January, 1930. 


In the next place the Russians had in mind the claims of the 
United States and Japan against the line amounting approxi- 
mately to $10,000,000. United States interest in this regard had 
been expressed to the Chinese Government in a note dated May 
17, 1924, and reiterated on July 14, 1924, at the time China was 
coming to an agreement with the Soviet Government, and was 
another reason for Moscow's anxiety to keep the issue strictly 

French interest in the matter was another ground for Russian 
suspicion. Repayment of the French money used by the Russians 
to build the Chinese Eastern Railway is still an issue between 
Paris and Moscow. The agreement by the French-protected bank 
in 1920, the reservation by the Powers at Washington "to insist 
hereafter upon the responsibility of China for the performance 
or non-performance of the obligations toward the foreign stock- 
holders, bondholders, and creditors of the Chinese Eastern Rail- 
way Company," and the publication in 1929 of a statement to 
the effect that sixty per cent of the bank's shares were actually 
in French hands, 28 were all moves for asserting the French in- 

Misunderstanding over the chronology of events arose partly 
because of the uncertainty with which Sino-Soviet diplomacy 
was enshrouded and partly because of the necessity for the 
United States, not in diplomatic intercourse with Russia, to use 
France as the bearer of the Stimson statement. Dispatches men- 
tioning the Soviet-Mukden negotiations were published in the 
United States on November 29. On November 30 the Stimson 
statement was dispatched to France for transmission to Moscow; 
Moscow says it was received on December 3. On the same day 
Moscow sent a reply, on the text of which as it appeared in the 
press Mr. Stimson made a public press comment, although "on 
December 6 Mr. Stimson had not yet received it officially through 
Paris." 29 

In his "amazement" that the United States should give "advice 

28 See pp. 409-410. 

29 Walter Duranty in the New York Times, December 9, supplied these dates. 
No dates are given in Press Releases, December 7, 1929. 


and counsel" to a country with which it has no official relations, 
Mr. Litvinoff omitted to assert a common denominator of for- 
eign policy between the United States and Soviet Russia, both 
of which have professed that the Pact of Paris is the pivot of 
their foreign policy. This failure gave Mr. Stimson an oppor- 
tunity to bracket Great Britain, not the U.S.S.R., with the 
United States. The Secretary of State, in a public reply to the 
Litvinoff memorandum, quoted the Hoover-MacDonald declara- 
tion, and himself reiterated that the Pact of Paris was the in- 
strument with which the United States "intends to shape its own 
policy." The comment of the Washington correspondent of the 
London Times was to the effect that if Mr. Litvinoff had taken 
a more reasonable attitude and recognized the good faith of the 
November statement by Mr. Stimson, 

a step would undoubtedly have been made toward that political 
recognition by this country which Moscow desires. It would be 
absurd not to assume that this had been considered by President 
Hoover and the Secretary of State (Mr. Stimson) and by them ac- 
cepted as a not unwelcome contingency. 80 

While Soviet Russia curtly rejected advice and counsel, China, 
as the weaker vessel in need of helpful intercession, continued to 
cultivate it. Yet until persuaded by Soviet military pressure it 
refused, preliminary to negotiations, to restore the status quo 
ante which it had broken by a series of unpeaceful-like acts 
hardly in keeping with Article II of the Pact. The explanation 
of the inconsistency may be found in the Chinese effort to end 
the regime of special privileges enjoyed by foreign powers in 
China, one of which is Soviet joint operation of the Chinese 
Eastern Railway. When China in 1927 began its determined 
campaign to escape the obligations imposed on it by its so-called 
unequal treaties with foreign powers, 81 it received the assistance 
of the Bolshevists, who had their own ends in view. Although the 
agreement making the Chinese Eastern Railway a Russo-Chinese 
enterprise restored to the Bolshevists to some extent the special 
position in North Manchuria once occupied by the Tsarist gov- 

30 London Times, December 24, 1929. 31 See pp. 139 ff. 


eminent, Chinese nationalism, nevertheless, glowing with injec- 
tions of Bolshevist propaganda, hailed the agreement in 1924 as 
"a great victory for China," because 

it opened a new era in the diplomatic history of China, placing the 
country for the first time on terms of absolute equality and reci- 
procity with a Western Power and furnishing a foundation upon 
which China has striven to build a new structure of her interna- 
tional relations. 82 

In time, as the effects of Bolshevist propaganda wore off, the 
Chinese began to look at the railway through Chinese eyes, and 
to realize that its operation jointly with Russia was as "in- 
tolerable" as any other special privilege in China. The Chinese 
case vis-a-vis Article II of the Pact of Paris is that the termina- 
tion of the state of tilings obnoxious to them on the Chinese 
Eastern Railway, preventing the agreed parity in administra- 
tion, could not be accomplished except by forceful measures ; the 
Russians, adopting the device of not allowing meetings of the 
board of directors, in fact had vested all powers in the Russian 
manager instructed from Moscow, except as the Chinese could 
force concessions from him. 33 The Pact is thus faced with the ob- 
jection often made to the League of Nations, in spite of Article 
19 of the Covenant, that it has hitherto provided no way of cor- 
recting a troublesome but legally incontestable situation. 

On the evidence of the first test the criticism was made that 
the Pact is deficient in two chief respects. First, as Secretary 
Stimson recognized in July, it can operate only from the basis 
of the status quo, and it provides for no means of restoring the 

32 Ken Shen Weigh, Riisso-Chinese Diplomacy, p. 302. 

83 The agreements of 1924 were expressly declared provisional, the arrange- 
ment made to continue only until the conference provided for to settle definitely 
the relations between the two countries had taken action, and disputes were to 
be submitted to the two governments. The agreements were intended to establish 
joint control under a Russian manager, but in the event of difference as to what 
the treaty meant or as to the powers of the manager, the intention in the treaty 
was to refer the dispute to the two governments for adjustment, and it is at 
least arguable that the Chinese injured their case by precipitate action. Clearly, 
however, had the railroad been operated on any such joint basis with the right 
to refer disputes to the governments, it could not have been run successfully, if 
at all, and this would be the Russian position. 


status quo ante when this has been destroyed by such force as the 
Chinese used. Second, the Pact provides no way "of correcting a 
valid but inequitable or impracticable treaty which may, as the 
Chinese-Russian treaty did in this case, provoke one nation to 
the use of force." 84 

The difficulties and inconveniences of relations with Russia and 
China under the Pact were foreseen by Sir Austen Chamberlain 
as far back as May 19, 1928. In a note to Secretary Kellogg he 

Universality would, in any case, be difficult of attainment, and 
might even be inconvenient, for there are some states whose govern- 
ments have not yet been universally recognized, and some which are 
scarcely in a position to ensure the maintenance of good order and 
security within their territories. 

He went on to suggest that the conditions for the inclusion of 
such states among the parties to the new treaty was a question to 
which "further attention might perhaps be devoted with ad- 
vantage," adding, however, that this was a minor matter as 
compared with the more important purpose in view. As compared 
with other qualifications of the idea of universality, this doubt 
of Sir Austen's was so gentle that it was soon lost sight of. The 
effort to impose the Pact obligations on erring states exposed the 
inconvenience that the British Foreign Secretary foresaw. Rep- 
resentations to China under existing circumstances are rendered 
difficult by the lack of a central government whose writ would 
run throughout its de jure jurisdiction. As yet the capital with 
which the world maintains diplomatic relations is only the nomi- 
nal center of national authority. Acceptance of the theory of 
Chinese unification under the Nationalists was probably occa- 
sioned by the need to recognize diplomatically some organ for 
the purpose of negotiating a long list of outstanding issues. A 
foreign complication served to disclose the seat of de facto au- 
thority, but no indication of this appeared in the Pact of Paris 

Another aspect of the inconvenience of invoking the Pact in 

34 New York World, November 28, 1929. 


relations with China is that China chafes at the extraterritorial 
system and regards the privileges enjoyed by foreign nationals 
in China as tantamount to an Imperium in imperio. The issue 
was brought to a head simultaneously with the outbreak of the 
Russo-Chinese conflict. Conversations on both subjects appar- 
ently proceeded at about the same time in Washington. Clearly 
they bore some relation to each other, since the Powers could not 
isolate the Chinese denunciation of a special privilege enjoyed by 
Russia when they themselves enjoyed similar privileges which 
were also threatened with denunciation. 

Since war is precluded by Chinese impotence, the Powers have 
recourse to measures short of war in defense or furtherance of 
their Chinese interests. These measures include the landing of 
troops, invasion, the circumscribing of zones of hostilities, the 
massing of troops on frontiers, and the reinforcing of existing 
garrisons on Chinese soil. Some of these national weapons, like 
those used by the United States in the Caribbean, may fall in the 
twilight zone between war and peaceful settlement. 85 Incidents 
which in some countries might be a violation of Article I may in- 
deed produce a peaceful settlement under Article II. Certain 
forceful Japanese actions in Manchuria, for example, have ended 
a local clash by promoting a peace conference. Undoubtedly the 
dispatch of a British expeditionary force to Shanghai in 1927 
saved that city from bloodshed and chaos. And the Chinese vil- 
lagers in North Manchuria, terrified by their Chinese defenders, 
hailed the Russian soldiers as deliverers. 

Some of the difficulties of the Pact of Paris arise from the 
extraordinary variety of the circumstances under which hostili- 
ties may be begun. Those who are concerned in the strengthening 
of the Pact wish to supplement its formulas with some interna- 
tional organ in order that the Pact may be applied and fitted to 
the different occasions which arise. In Aristotelian phrase, the 
rigid rod of a verbal text should be supplemented by the leaden 
rule of equity. A host of other difficulties in the international 

as In 1902 when Great Britain declared a pacific blockade against Venezuela 
in support of British claims, refusal of the United States to consent to a pacific 
blockade forced Great Britain to declare a war blockade. 


world arise, like the dispute over the Chinese Eastern Railway, in 
some pre-war stage, and by the time one of the parties decides 
to employ military force to protect its interest, a third-party 
intervention to solve the original issue has become difficult if not 

The most significant feature of this matter is the activity of 
the United States, enlisting the cooperation of other great states, 
in the effort to prevent war. If this is to be the policy of the 
United States, and that is seemingly the import of Mr. Stimson's 
reply to Mr. Litvinoff , then there is new support for the view that 
the Pact of Paris, though not in itself a complete instrument of 
international order, is one of the texts on which such an order 
may be built. 





FOUR years of experience with the Dawes Plan persuaded the 
reparation creditor nations that the time had arrived to ad- 
vance a step toward a definitive settlement with Germany. By na- 
ture and intent the Plan was transitory. In the words of the 
Dawes Committee it was "a settlement extending in its applica- 
tion for a sufficient time to restore confidence." 1 Pending that 
time the recovery of reparations was insured by a system of con- 
trols over German sources of reparations which transcended Ger- 
man sovereignty. Obviously this must be a temporary expedient 
to apply to a nation which was rapidly returning to the ranks of 
the great Powers. 

So apprehensive were the reparation creditors that the Dawes 
Committee might try to "settle" the reparation problem that they 
limited its terms of reference to an inquiry into means for balanc- 
ing the German budget and for stabilizing the German currency. 
Since measures to this end had already been taken by Germany, 
the function of the Committee must be sought elsewhere. Simply 
stated it was to provide a kind of truce for the political turmoil 
which had hitherto surrounded reparations. By choosing eco- 
nomic experts the governments eased the apparently insuperable 
obstacles of a purely political agreement, but the result, though 
produced by economists and business men, was perforce a "politi- 
cal measure taken in political circumstances for a political end." 2 
The Dawes Committee itself admitted its political fetters when it 
stated that "political considerations necessarily set certain limits 
within which a solution must be found if it is to have any chance 
of acceptance." 

So, with an eye on the German budget and currency, the Com- 
mittee treated reparations as a current problem, and set up con- 
ditions for future study. It named no capital sum to represent 

1 Reparation Commission. The Experts' Plan for Reparation Payments, p. 39. 

2 R. E. C. Long, The Mythology of Reparations, p. 35. 


the German debt, but outlined two kinds of annuities, leaving one 
series without a time limit. The total annuities were graduated up 
to a standard payment in the fifth year of 2.5 billion 8 marks, or 
$595 million. Of this amount $228 million represented 5 per cent 
interest and 1 per cent sinking fund instalment on $3.8 billion of 
mortgage bonds issued to the creditors by the German railways 
and German industry under the guaranty of the German Govern- 
ment. This series should therefore have been retired in about 
thirty-seven years. The remainder of the annuity, $367 million, 
came out of the budget and a transport tax, and was to be paid 

The Germans were therefore uncertain as to the total debt they 
were called upon to shoulder. Save for minor adjustments this 
had not been changed since it was stated as 132 billion marks, or 
$31.5 billion, by the Reparation Commission in 1921. Instalments 
of 2.5 billion marks under the Dawes Plan would be about 2 per 
cent of 132 billion gold marks, or less than the sum required to 
pay interest alone, and at this rate Germany could never ex- 
tinguish its debt, which would continue to mount with the addi- 
tion of unpaid interest. The 1921 conception of reparations had 
thus been reduced to an absurdity; inevitably the Plan accus- 
tomed people to think of capital sums of lower magnitude. If the 
interest and sinking fund rates borne by the mortgages applied 
to the indefinite annuity, the total German debt could not be more 
than $10 billion, or a third of the 1921 sum. This figure was 
worked out in unofficial discussions of the Dawes Plan and helped 
to make the 1921 figure recede from view as anything but "stage" 
money. Nevertheless the amount of the German debt remained 
an unknown quantity, subject to final determination, and the 
claims of the creditors were not dead but sleeping. 

Defining the New Attitude. 

Save for Great Britain the European creditors as well as Ger- 
many had reason to require a definitive settlement. Great Britain 
was passive, not being anxious to disturb the status quo; the posi- 

3 Billion is here used in the American sense as 1,000,000,000, which in Europe 
is called a milliard. 


tion almost satisfied the terms of the Balfour Note of 1922, which 
announced British policy as requiring only enough money from 
its European debtors and from Germany to cover its outgoing 
payments to the United States. This budgetary equilibrium 
might be upset by a revision of the German receipts, and British 
diplomacy would have the task of restoring the balance at the 
expense of the ex- Ally debtors, who were committed by agree- 
ment to make good any deficiency. In the British view the burden 
of proof was on Germany to show cause why the Dawes Plan 
should not be maintained, at least through the standard year, so 
that its capabilities might be assessed in the light of added ex- 

Since 1922 realistic attitudes in Great Britain had changed in 
emphasis. In its original aspect the Balfour Note marked the last 
effort of the British Government to promote all-round cancella- 
tion of debts and reparations. This coincided with British self- 
interest. Overseas trade constitutes a greater proportion of Brit- 
ain's activity than is the case with any other country. On a per 
capita basis its export of finished goods is four times that of the 
United States and twice that of Germany and France. British ex- 
porters felt that debt remission would help them out of their post- 
war troubles by releasing more buying power for British goods. 
But the failure of the cancellation movement, and the advent of 
the alternative principle of the Balfour Note that Britain would 
receive from its debtors and Germany only enough to pay its 
debt to the United States marked a change in British sentiment 
which may be described roughly as a shift from markets to 
budgets. To the taxpayer a diminished contribution from war 
debts and reparations represented so much more out of his pocket 
for national upkeep. Since 1922 his problems had become so 
pressing that when A. G. Gardiner called the Balfour Note "a 
mood of financial bravura" he expressed a widespread feeling. 
Retreat from the doctrine, though encouraged from time to time 
by the delay in French ratification of the British debt, was, how- 
ever, hardly practicable; there must be no deficit, that was all. 
At Chingford on October 22, 1928, Mr. Churchill, after saying 
that Great Britain was on the point of achieving the position 


aimed at in the Balfour Note, stated, "We shall do everything in 
our power to maintain that position in the future." 

Before it would acquiesce in any revision of the German debt 
Great Britain required of France, the chief reparation bene- 
ficiary, an assurance that this position would be safeguarded. 
Mr. Churchill obtained such assurance from M. 'Poincare on 
October 19, 1928, when it was also decided that the creditor 
shares as fixed at the Spa Conferences of 1920 would not be dis- 

To the other main European creditors of Germany the posi- 
tion was different. They had debts to England as well as to the 
United States and had therefore to rely entirely on Germany for 
cover. Except for France they had reached definitive agreements 
for meeting their war debt payments. France was under pressure 
either to ratify or repudiate its debt agreements; therefore the 
need for ending the tentative regime of German reparations was 
probably more urgent to France, which received over 50 per cent 
of German payments, than to Germany. In fact, the impetus to 
revision, which came from the Agent General for Reparation Pay- 
ments, Mr. Parker Gilbert, derived its principal support from 

Bluntly, the French wished to secure from Germany a capital 
sum instead of relying entirely upon annuities. This could be 
done by putting reparations in commercial form. German repara- 
tion bonds could be issued to world investors, the proceeds paid 
over to the creditor governments, and the reparation debt thus 
transformed from obligations to foreign governments to obliga- 
tions to private persons. In 1917 the same idea had been sug- 
gested in connection with the Ally debts held by the United 
States; a clause in the war-loan act conferred on the Treasury 
the power to sell any of these foreign obligations and apply the 
proceeds to the reduction of domestic debt, but for many reasons 
the provision was not carried out. 

France did not need the proceeds of such loan operations to 
augment its cash resources. It had a surfeit, not a shortage, of 
capital, and at the end of 1928 its banking position was the 
strongest in Europe, measured in gold holdings and balances 


abroad. In part the French attitude was explicable on the ground 
that France required a shift in the relationship of debtor and 
creditor. A debt owed by one nation to another holds the possi- 
bility of friction and consequent downward revision ; a debt owed 
by a nation to investors at large is on a more permanent footing 
and affords less likelihood of political trouble. 

This, then, was the core of French policy in respect of a re- 
vision of the German liability. On its satisfaction depended 
French willingness to 

(1) resign the lien of Rhine control; 

(2) reduce its bill for restoring the ruined areas of France which 
was still charged against Germany; 

(3) ratify its war debt agreements with Great Britain and the 
United States. 

Restoration of Confidence. 

Preparatory to the initiation of discussions leading to a con- 
ference it was necessary to find out whether confidence in Ger- 
many had been sufficiently restored to permit of the reconsidera- 
tion of reparations. This was not hard to establish. A favorable 
verdict had already been rendered by the Agent General for 
Reparation Payments in his report dated December 10, 1927. The 
Plan had worked without a hitch. Payments had been made regu- 
larly and the Transfer Committee in Berlin had had no occasion 
to invoke its powers to suspend transfers in case of a threat to Ger- 
many's exchange stability. Creditor-debtor relations had greatly 
improved. On their part the Germans had afforded the maximum 
of cooperation ; under Mr. Gilbert the impingement of the Dawes 
mechanism on German sovereignty had created no friction. 

Mr. Gilbert stated that further experience was needed before 
full judgments could be formed, but as time went on it became 
clearer that "neither the reparation problem, nor other problems 
dependent upon it, will be finally solved until Germany has been 
given a definite task to perform on her own responsibility, with- 
out foreign supervision and without transfer protection." This, 
he thought, should be constantly borne in mind by the reparation 


The Agent General's words did not fall on deaf ears. On Feb- 
ruary 2, 1928, M. Briand in the Chamber of Deputies declared 
his expectation that the year would not pass without producing 
some attempt to bring about revision. Discussions were expedited 
by Mr. Gilbert in conversations with Allied statesmen and in his 
interim report of June 7, 1928, when he returned to his reminder 
of the task yet to be undertaken. 

To Germany a final settlement of reparations was no whit more 
desirable than the liberation of the Rhineland. Dr. Stresemann 
made clear the German standpoint during his visit to Paris in 
August, 1928, to affix the German signature to the Pact of Paris ; 
he argued with the French the necessity of getting rid before the 
scheduled date of what he had once called "that iron curtain." 
This resurrected at once the question of sanctions in case of Ger- 
man default. In the French scheme Rhineland occupation was the 
ultimate guaranty of reparations, and the purpose of the army 
on the Rhine was to speed up reparation payments. Old ideas of 
security also came back, casting doubt on the bona fides of Ger- 
man policy and complicating the purely reparational aspect of 
the Rhine occupation. Sanctions and security these were vital 
words in the French lexicon, and they occurred frequently in the 
speeches of French statesmen during 1928. 

Problem of Sanctions. 

Sanctions in the Treaty of Versailles were built up in Articles 
428432 in accordance with French desires; no contingency 
seems to have been overlooked. Article 429 stipulated that if 
Treaty conditions were faithfully carried out, the forces occupy- 
ing the Rhineland would be successively withdrawn in three 
stages. The third stage was to expire in 1935, when German terri- 
tory would be free. But this was dependent on evidence of Ger- 
man good will. Lack of guaranties satisfactory to the creditors 
might induce delay in leaving the last zone, and this qualification 
was tightened by Article 430, which also provided for entire re- 
occupation, even after the expiration of the fifteen-year period: 

In case either during the occupation or after the expiration of the 
fifteen years referred to above the Reparation Commission finds 


that Germany refuses to observe the whole or part of her obliga- 
tions under the present Treaty with regard to reparation, the whole 
or part of the areas specified in Article 429 will be re-occupied im- 
mediately by the Allied and Associated forces. 

As a trading point in a new reparation deal, the "or after" of 
Article 430 served to retain value in what by the efflux of time 
would have been a wasting asset. But Germany, said Dr, Strese- 
mann, in a speech in the Reichstag on November 19, would never 
"purchase evacuation with financial compensations." 

Undoubtedly the fear of trading prompted the Germans to 
resist the linking together of reparations and Rhine evacuation. 
Their standpoint in this respect found a certain amount of sup- 
port in Great Britain, from Mr. Churchill among others. In the 
House of Commons on November 8, Mr. Hore-Belisha asked him 
whether the reparation settlement was bound up with the question 
of the evacuation of Rhine territory. Mr. Churchill answered: 
"No, that is a separate but also a desirable object." 4 The British 
Chancellor evidently responded in an unguarded moment, for it 
seems difficult to square this view with the Treaty ; certainly the 
two are related. Nor did there seem much point in the concur- 
rent endeavor of a section of German opinion to reject the war- 
rant for collecting reparations because it denied war guilt. "The 
word 'reparation' since the war has acquired a special meaning," 
says Carl Bergmann, "and is understood to signify the obligation 
of the vanquished, and of Germany in particular, to repair the 
damages suffered by the victors;" 6 discussion of war guilt was 
therefore a blind alley down which to lead those who were pursuing 

On firmer ground were those Germans who urged the proofs 
of German good will as arguments in favor of ending the occupa- 
tion. Provided these were forthcoming, evacuation before the 
scheduled time had in fact been promised on June 16, 1919, in a 
public statement over the signatures of President Wilson, M. 
Clemenceau, and Mr. Lloyd George which declared that "the 
Allied and Associated Powers did not insist upon making the pe- 

* Hansard, November 8, 1928, Col. 217. 

5 Carl Bergmann, The History of Reparations, p. 3. 


riod of occupation last until the Reparation clauses were com- 
pletely executed because they assumed that Germany would be 
obliged to give every proof of her goodwill and every necessary 
guarantee before the end of the fifteen years time." "Every proof 
of her goodwill" had been furnished by Dr. Stresemann and by 
German confidence in his policy, which was based on the fulfil- 
ment of Treaty obligations. "Every necessary guarantee" seemed 
to reside in the Locarno Pact, which had induced the evacuation 
in 1926 of the first of the occupied zones. And both good will 
and guaranty had presumably been acknowledged in the admis- 
sion of Germany to the League of Nations. In these circum- 
stances it appeared anomalous to maintain a force of occupation 
on German soil and inconsistent to refuse to apply to the rest of 
the occupied zones the precedent established by the evacuation 
of the first zone. 

The 1919 statement owed its inspiration to Article 431 of the 
Treaty, reading: 

If before the expiration of the period of fifteen years Germany 
complies with all the undertakings resulting from the present 
Treaty, the occupying forces will be withdrawn immediately. 

In the discussions this Article was subject to a cross fire of inter- 
pretations of which the target was the word "complies." According 
to one school this connoted "has complied," and, according to the 
other, "is complying." But if, as the French saw it, the former 
were intended, or the complete execution and discharge of Ger- 
many's obligations, an irreconcilable element entered into the 
time schedule for the liquidation of Rhine evacuation and of 
reparation. According to this thesis liquidation of both affairs 
should have been synchronous, but such a view gained no validity 
from the Treaty; other factors being constant, the freeing of 
German territory was fixed for 1935 and the discharge of repara- 
tions for 1951, subject to an extension of time. 

Diversity of opinion prevailed in